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Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch us

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Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the

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Speaker 1: iHeartRadio app, and the Bloomberg Business App, or listen on

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Speaker 1: demand wherever you get your podcasts.

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Speaker 2: Thanks for joining us on Bloomberg Sound On. We're live

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Speaker 2: from Washington, as we do each weekday at this time.

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Speaker 2: The headline from the White House there are simply no

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Speaker 2: good options. They said it before about the trillion dollar coin,

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Speaker 2: now about the fourteenth Amendment. Here's Treasury Secretary Jennet Yellen

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Speaker 2: on ABC this week.

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Speaker 3: There is no way to protect our financial system and

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Speaker 3: our economy other than Congress doing its job and raising

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Speaker 3: the debt ceiling and enabling us to pay our bills.

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Speaker 3: And we should not get to the point where we

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Speaker 3: need to consider whether the president can go on issuing debt.

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Speaker 3: This would be a constitutional crisis, but of.

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Speaker 2: Course people wouldn't be asking that if we were not

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Speaker 2: pretty much at that point already. Constitutional scholars and economists

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Speaker 2: split on the idea that the administration could in fact

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Speaker 2: continue issuing debt by setting a provision in the Constitution

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Speaker 2: that says the validity of public debts quote, shall not

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Speaker 2: be questioned unquote. So I'm now on the eve of

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Speaker 2: the big meeting at the White House with President Biden

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Speaker 2: and congressional leaders, and by that I mean Kevin McCarthy.

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Speaker 2: The real question is what's the incentive? Right, So, what's

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Speaker 2: the incentive to compromise the leap? Sing former Biden Administration

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Speaker 2: economic advisories now at PGIM Fixed Income tells Bloomberg TV

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Speaker 2: this morning, it's going to take a spasm something you

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Speaker 2: probably don't want to see in the market.

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Speaker 4: The incentives are just not yet in place.

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Speaker 5: McCarthy could lose a speakership if he folds early to

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Speaker 5: the president with a clean increase in the debt limit.

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Speaker 5: The President can give a nod to anything near the

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Speaker 5: scale of spending cuts proposed by McCarthy because they would

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Speaker 5: undercut much of his domestic agenda and lose his political base.

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Speaker 5: So I'm afraid markets stress is still what's needed to

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Speaker 5: create cover for facating.

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Speaker 2: The market stress. Not a great starting point for this

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Speaker 2: meeting tomorrow, but let's talk about it with Eric Watson,

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Speaker 2: Bloomberg Congressional reporter. Eric, I realized I haven't even mentioned

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Speaker 2: the words debt ceiling or debt limit yet. This hour

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Speaker 2: and everyone I'm sure knows what I'm talking about here,

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Speaker 2: and it's all going to come to a head tomorrow

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Speaker 2: afternoon at the White House. Are we expecting results from

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Speaker 2: this meeting?

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Speaker 6: Well, you know, I don't think a deal would be announced.

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Speaker 6: That would be really shocking to me. But they could

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Speaker 6: announce either a framework or a process, and I'm betting

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Speaker 6: on a process. You know, they could deputize, for example,

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Speaker 6: the heads of the Appropriations Committee to come up with

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Speaker 6: a top line budget number for discretionary appropriations, and those

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Speaker 6: guys could meet him the next couple of weeks and

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Speaker 6: then perhaps come up with you know, maybe not one

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Speaker 6: hundred and thirty billion dollar cut that McCarthy waants, but

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Speaker 6: somewhere in the middle. That's one thing. And then you know,

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Speaker 6: they could both say, well, this is about the debt

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Speaker 6: silling or this is just about the budget and call

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Speaker 6: it a day. That's the way things could work out.

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Speaker 6: But there's lots of because you pointed out that things

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Speaker 6: that things don't Yeah.

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Speaker 2: I suspect this goes fairly long, right. The last meeting

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Speaker 2: was lengthy, the one rescutch of eighty something ninety days ago. Now,

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Speaker 2: Kevin McCarthy came out, did the full routine in the driveway,

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Speaker 2: at the stakeout at the White House? Will he have

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Speaker 2: good things to say tomorrow? Would it behoove him to

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Speaker 2: show progress like he did the first time?

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Speaker 6: I mean, of course, I think he does want a deal.

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Speaker 6: You know, he doesn't. He doesn't really like the standoff

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Speaker 6: as much as anybody. But he can't really cut a

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Speaker 6: low ball deal and as you mentioned, survive the Conservative

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Speaker 6: secure and a mechanism by which any one member can

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Speaker 6: bring a vote of no confidence. It's also also a

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Speaker 6: big question of how Democrats would behave in that scenario.

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Speaker 6: But even if the Democrats failed him out and you know,

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Speaker 6: provided enough votes to keep him in the chair, he

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Speaker 6: would be you know, a wounded wounded animal at that

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Speaker 6: point politically. So you know, it's just not a good

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Speaker 6: a good place for him to go. You know, I

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Speaker 6: tried to press Chip Roy and other of the House

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Speaker 6: Freedom Caucus members. You know, if he came back with

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Speaker 6: with sixty five billion cuts, how are you going to react?

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Speaker 6: They wouldn't say. They don't want to talk about how

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Speaker 6: they react to a compromise. They want to keep their

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Speaker 6: cards close to their vests. And of course there are

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Speaker 6: some like Ralph Norman, another Freedom Caucus member, who said

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Speaker 6: he wouldn't vote for anything smaller cuts than those that

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Speaker 6: passed the House two weeks ago. And he's he and

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Speaker 6: others aren't going to be there on the final uh

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Speaker 6: you know vote. It's going to be a part of

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Speaker 6: That's why Hakeem Jeffrey is the Democratic leaders in the meeting.

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Speaker 6: He's gonna have to He's going to have to provide

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Speaker 6: votes for a compromise. And you know, he's also been

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Speaker 6: commenting he's not ready to endorse anything. So you know,

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Speaker 6: it's it's a fits four players there. And McConnell, the

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Speaker 6: minority leader in the Senate, made a big move, I

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Speaker 6: thought this weekend, signing out to a letter saying he wouldn't,

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Speaker 6: you know, vote for a clean increase so or provide cloture,

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Speaker 6: which means shut off debate. So that's another sign that

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Speaker 6: they're all kind of lining off with their other respect

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Speaker 6: to teams and facing off pretty starkly here.

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Speaker 2: I'll tell you what. I hope you're planning for a

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Speaker 2: long day tomorrow eating your wheaties. Eric Watson, Bloomberg Congressional reporter,

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Speaker 2: will be covering that for US as always, and we

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Speaker 2: want to talk to Tim Romer about all of this.

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Speaker 2: The former ambassador to India was also a congressman and

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Speaker 2: in fact was a nine to eleven commissionaries now current

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Speaker 2: executive director Strategic counselor at APCO Worldwide and knows a

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Speaker 2: little bit about cutting deals. Mister ambassador, thanks for being

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Speaker 2: back with us on Bloomberg Radio. I always enjoy the discussion.

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Speaker 2: As you consider the amount of pressure that Kevin McCarthy

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Speaker 2: is getting from within his own house, you add that

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Speaker 2: letter from the Senate that Eric Wasson mentioned pretty much

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Speaker 2: every Republican senator on there saying Nope, don't look over

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Speaker 2: here for a deal, no clean debt limit bill. Who

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Speaker 2: does he actually need to impress tomorrow President Biden or

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Speaker 2: Republicans here in Washington.

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Speaker 7: Well, Joe, good to be with you too, And we've

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Speaker 7: got a very very difficult negotiation taking place tomorrow with

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Speaker 7: a lot at stake in the markets, people's four oh

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Speaker 7: one K accounts and just market volatility. If we can't

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Speaker 7: get to some kind of a solution on this look,

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Speaker 7: there are four potential outcomes, not immediately after the beating

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Speaker 7: yesterday tomorrow at the White House, but coming on. You

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Speaker 7: can pass something outright. You could have a short term extension,

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Speaker 7: which might be the more likely outcome. You could have

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Speaker 7: a game of chicken and just see who gives first

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Speaker 7: and what the markets do. Or you know, you try

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Speaker 7: to circumvent the process, either with the fourteenth Amendment as

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Speaker 7: an emergency clause, or you have a discharge petition on

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Speaker 7: the House floor and Democrats try to cajole and persuade

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Speaker 7: five Republicans to go along with them to get something

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Speaker 7: cleaner down on the House floor. We are we're rapidly

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Speaker 7: approaching game time for all four of these folks to

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Speaker 7: sit down and have a very serious negotiation.

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Speaker 2: Joe, Well, we really are. And I just wonder when

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Speaker 2: you consider the idea of compromise. And I don't suspect

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Speaker 2: we're going to really see much of it until the

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Speaker 2: market starts to really protest what's going on here. But

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Speaker 2: everybody is so used to this being worked out at

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Speaker 2: the last minute that that might take some more time here.

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Speaker 2: I just wonder, how do both parties come out of

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Speaker 2: the meeting tomorrow looking like they accomplish something. Everyone's got

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Speaker 2: something to check off here on their list. And for

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Speaker 2: Kevin McCarthy. It's difficult because he's not been terribly specific.

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Speaker 2: He didn't actually put a full budget down, and he's

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Speaker 2: been beyond top line budget cuts, not terribly specific about

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Speaker 2: what would give him a win. And that's kind of

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Speaker 2: the point here, right, we have to find a way

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Speaker 2: for both sides to be able to take credit for

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Speaker 2: some kind of progress.

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Speaker 7: Well, I think you've put your finger right on the

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Speaker 7: issue you here, Joe, and that is tomorrow will probably

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Speaker 7: look more like, you know, an initial uh you know,

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Speaker 7: strategic positioning for a later deal. Everybody is going to

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Speaker 7: try to look good to their base, They're going to

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Speaker 7: try to look strong and their negotiating point. I think

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Speaker 7: President Biden probably does not want to give too much

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Speaker 7: on what he has tried to get it is a

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Speaker 7: clean up and down vote, but he'll probably talk to

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Speaker 7: Speaker McCarthy in private about, uh, you know, what do

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Speaker 7: we do on budget reform? What might we talk about

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Speaker 7: in terms of some spending cuts, COVID return of money

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Speaker 7: that's not spent, student debt, relief issues that the courts

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Speaker 7: may decide upon anyway, Uh, you know, what can what

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Speaker 7: can they talk about to eventually get to a deal

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Speaker 7: that McCarthy can sell to his House members. I mean, Joe,

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Speaker 7: this is a little bit like, uh, you know, I've

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Speaker 7: heard the term passing a kidney stone. I've never done

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Speaker 7: it before. It's really painful. It happens at some point,

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Speaker 7: but depending upon the size of the stone, it can

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Speaker 7: be very very excruciating process and painful to all sides.

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Speaker 2: Yeah, well that's quite an image, Ambassador. I'll tell you

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Speaker 2: this looks like this White House might have to pass

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Speaker 2: a couple of them this week because we have the

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Speaker 2: meeting tomorrow, We've got an inflation report out on Wednesday,

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Speaker 2: and then Title forty two of all Things lifts on Thursday.

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Speaker 2: From a political communications standpoint, how do you prepare the

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Speaker 2: nation for all of these things at once or do

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Speaker 2: you end up Friday with an even lower approval rating.

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Speaker 7: Well, the President got some tough news over the weekend,

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Speaker 7: and the poll that said he was at thirty six percent,

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Speaker 7: and other polls have showed him, you know, thirty nine one.

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Speaker 7: They had a great strong bargaining position for him to

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Speaker 7: go into this debt reduction bill and on border immigration policy,

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Speaker 7: which is very, very vile, and the Sudan hearings that

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Speaker 7: are going to take place on the Hill. We have

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Speaker 7: a critical situation happening in Africa where China is making

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Speaker 7: more and more in roads and the United States would

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Speaker 7: like to see peaceful outcome of the civil war and

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Speaker 7: one hundred thousand people leaving Sudan in the last couple

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Speaker 7: of weeks getting out as quickly as they can. So,

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Speaker 7: you know, this is a tough week for the president

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Speaker 7: man and he's got to show strengths. And I would

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Speaker 7: say this too, Joe McCarthy has shown resiliency and some

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Speaker 7: unpredicted power in the last couple of weeks. He got

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Speaker 7: a bill through the House on debt relief. Bayiner couldn't

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Speaker 7: do it. Ryan, previous speakers could not do it, and

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Speaker 7: I ended up bringing both of those Republican speakers down before,

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Speaker 7: but McCarthy did it. So Biden is now negotiating with

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Speaker 7: a stronger speaker, McCarthy, which is both good and bad.

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Speaker 7: It's it's bad for Biden in the sense that he's

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Speaker 7: got a stronger position, especially with McConnell's letter over the

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Speaker 7: weekend showing Republican Senate support for the House Republican position.

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Speaker 7: But it also shows that with the McCarthy's strength, he

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Speaker 7: could potentially sell the deal to his caucus. Does he

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Speaker 7: end up losing half his caucus on a vote? Does

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Speaker 7: he lose a third of them? And I think one

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Speaker 7: of the keys to look at here is going to

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Speaker 7: be Congressman Ship Roy from Texas. Does he eventually sign

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Speaker 7: on to a deal or even more importantly, does Chip

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Speaker 7: Roy loudly oppose it and go to the floor and

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Speaker 7: speak against it or does he quietly oppose it and

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Speaker 7: not make much of fuss about it. That will be

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Speaker 7: a key barometer to see whether or not this gets done.

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Speaker 2: It's really important. You said that Eric Wasson, who was

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Speaker 2: on before the ambassador used the same name. Now you're

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Speaker 2: hearing Tim Romer tell you to watch Chip Roy. He's

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Speaker 2: the Canary, I guess in this case, ambassador, and we're

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Speaker 2: awfully curious to see how this is going to play

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Speaker 2: out in the coming days. Tim Romer, former Ambassador to India,

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Speaker 2: former Congressman, with us again on Bloomberg Radio. Many thanks,

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Speaker 2: Ambassador for the insights. Let's assemble the panel. I want

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Speaker 2: to get their take on all of this. I mean,

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Speaker 2: Diana here from Genie Shanze, No, Lisa Camusso Miller throughout

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Speaker 2: the weekend, knowing that this conversation added a couple of wrinkles,

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Speaker 2: including that letter from the Senate Republicans, and then of

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Speaker 2: course you add that polling data for the president. We're

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Speaker 2: going to talk about that a little bit later on

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Speaker 2: the hour with our panel. But Genie, it's not getting

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Speaker 2: easier as we approach the meeting tomorrow, and I wonder,

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Speaker 2: if you're in agreement with the ambassador, is it possible

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Speaker 2: for both sides to come out looking like they've got

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Speaker 2: to win tomorrow? And I ask you that knowing that

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Speaker 2: that would help to advance the conversation to somewhere positive.

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Speaker 8: Yeah, I mean, I hope it is. It's a good

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Speaker 8: sign that they are talking finally. But I have to

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Speaker 8: tell you, over the week and hearing from Janet Yellen,

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Speaker 8: you played the cliff. He is saying, you know, it's

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Speaker 8: not my ballgame. I'm not responsible. You look at the

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Speaker 8: Senate Republicans, They're not responsible. Joe Biden saying Republicans in

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Speaker 8: the House are responsible. Everybody is passing the buck and

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Speaker 8: pointing the finger at everybody else, which makes me very

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Speaker 8: pessimistic about progress in this meeting because somebody is going

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Speaker 8: to have to take responsibility for them to come out,

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Speaker 8: as the ambassador said, with a framework or a process,

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Speaker 8: which or or I think your previous guests with a

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Speaker 8: framework or a process and in order to move forward.

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Speaker 8: And I'm not sure how you do that unless people

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Speaker 8: are willing to take responsibility.

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Speaker 1: Right.

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Speaker 2: We're not going to solve this thing tomorrow, obviously, Lisa,

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Speaker 2: but it seems awfully important to what happens next here.

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Speaker 2: If Kevin McCarthy comes out in the driveway and says

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Speaker 2: he is not a good faith negotiator. I knew it

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Speaker 2: all along. The President's not playing ball. This could go

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Speaker 2: down the tubes really quickly. If he came out and said, hey,

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Speaker 2: you know what, we made some progress, then they live

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Speaker 2: to see another day.

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Speaker 1: Yeah.

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Speaker 8: You know.

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Speaker 9: The best way I can put it show is it

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Speaker 9: just feels like a big game of chicken.

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Speaker 10: Right.

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Speaker 9: Everybody says they're not going to budge. Everybody says nothing's

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Speaker 9: going to happen. Well, the only people that suffer are

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Speaker 9: the American people in our economy, and this is just

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Speaker 9: it's bad for everybody, but it's especially bad for the

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Speaker 9: White House. They are going to have to deal with

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Speaker 9: just an incredible amount of criticism regardless of how this

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Speaker 9: goes down.

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Speaker 11: I mean it's going to be.

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Speaker 9: I think it's down to the last possible minute, and

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Speaker 9: to me, the Republicans look stronger than ever, especially now

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Speaker 9: that the Senate has signed on.

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Speaker 2: All Right, quick take from Jeanie and Lisa. We're going

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Speaker 2: to dig into this a little bit more, coming up

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Speaker 2: to talk specifics here on what an actual compromise could

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Speaker 2: look like. It's Monday time for new ideas. I'm Joe Matthew.

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Speaker 2: This is Bloomberg. You're listening to the Bloomberg Sound on podcast.

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Speaker 2: Catch the program live weekdays at one Eastern on.

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Speaker 1: Bloomberg Radio, the tune in alf, Bloomberg dot Com, and

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Speaker 1: the Bloomberg Business App. You can also listen live on

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Speaker 1: Amazon Alexa from our flagship New York station, Just say Alexa,

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Speaker 1: play Blue eleven.

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Speaker 2: You've heard some of the more outlandish, some of the

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Speaker 2: more creative ideas in solving the debt limit crisis, because

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Speaker 2: well that's what we do on Bloomberg. Yeah, the trillion

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Speaker 2: dollar coin, we talked that up and down lately. It's

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Speaker 2: been the fourteenth Amendment. Treasury Secretary Janet Yellen wasn't having

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Speaker 2: any of it when she was asked about these potential

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Speaker 2: options on ABC This Week.

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Speaker 3: What to do if Congress fails to meet its responsibility.

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Speaker 3: There is simply no good options, and the ones that

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Speaker 3: you've listed are among the not good options.

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Speaker 2: I got nothing else good to offer you except a deal,

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Speaker 2: and that process begins tomorrow when everybody sits down, presumably

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Speaker 2: in the cabinet room of the White House. Kevin McCarthy

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Speaker 2: has his day, Hakeem Jeffrey's, Mitch McConnell, Chuck Schumer, and

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Speaker 2: of course the President. This thing going to the wee hours.

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Speaker 2: They bring in sandwiches. Nobody knows exactly, but the optics

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Speaker 2: are pretty tough, the timing is even tougher, and I

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Speaker 2: just wonder what does a win look like. Both sides

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Speaker 2: need to feel like they got something. And that's where

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Speaker 2: the panel comes in. Genie Shanzo, Democratic analyst, Bloomberg Politics contributor,

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Speaker 2: joined today by Lisa Camusa Miller, former r NC Communications Director,

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Speaker 2: partner at RESET Public Affairs, and two trusted voices. You know,

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Speaker 2: we can't get two partisan in these conversations because you know,

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Speaker 2: we won't even get through this program, never mind the

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Speaker 2: actual meeting tomorrow. So Lisa let's pick up where we

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Speaker 2: left off here Kevin McCarthy, and pretty clear it doesn't

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Speaker 2: have a lot of wiggle room. He's got people in

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Speaker 2: the House Caucus, the House Republican Caucus saying that they

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Speaker 2: will not vote for anything less than was passed just

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Speaker 2: a couple of weeks ago in the House. So is

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Speaker 2: there something else he can do, maybe not using dollar signs,

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Speaker 2: a statement that he can make that will actually make

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Speaker 2: them happy to go into a second meeting. How does

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Speaker 2: he find that with Joe Biden omor.

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Speaker 9: Well, I mean, I think he's probably got the hardest

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Speaker 9: job of all because of that. I mean, I think, Joe,

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Speaker 9: you're absolutely right. These members have said that that bill

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Speaker 9: is the floor and not the ceiling. There is no

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Speaker 9: negotiating at all, and that's that's a tough place to be,

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Speaker 9: especially because the White House and the Democrats are saying

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Speaker 9: that they will do nothing but a clean debt ceiling

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Speaker 9: piece of legislation. So this now is really like I

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Speaker 9: said earlier, I mean, it's a game of chicken. Who's

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Speaker 9: gonna budge and McCarthy can't. He really can't, And the

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Speaker 9: White House has really got to find a way to

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Speaker 9: get to get the Republicans what they need in order

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Speaker 9: to get a compromise, while also making sure that we

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Speaker 9: don't default because Joe, I mean, that is the of

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Speaker 9: all of these things, that is the worst possible thing

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Speaker 9: that could happen.

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Speaker 2: So does Joe Biden then need to show up with

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Speaker 2: something for Kevin McCarthy. He told his interview on MSNBC

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Speaker 2: a couple of days ago, he's the most experienced guy

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Speaker 2: in the room. That's why his age should be palatable, Genie.

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Speaker 2: So what does that experience bring to the table tomorrow?

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Speaker 8: You know, I think Joe Biden has got to come

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Speaker 8: prepared to do what he always data Senator Biden, which

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Speaker 8: is to say, we can find a middle ground, we

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Speaker 8: can move forward. This is the brand that he sold

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Speaker 8: the American public. We can work across the aisle, we

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Speaker 8: can work together. And so I do think he's got

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Speaker 8: to come up with a plausible strategy for doing that,

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Speaker 8: and there are ways to do that. Quite frankly, you know,

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Speaker 8: how can they all win to come out? Have Democrats

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Speaker 8: and the Biden administration say we're going to get the

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Speaker 8: debt ceiling and we're going to negotiate, and Republicans to

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Speaker 8: say the same thing. The timing be damned. I mean,

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Speaker 8: the American public's not going to know once which who

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Speaker 8: blinked first if they are both able to come.

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Speaker 11: Out and do that.

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Speaker 8: So there is a solution to doing this, But the

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Speaker 8: problem is everybody has dug in their heels so much. Now,

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Speaker 8: you know, the optimistic part of this is that they

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Speaker 8: are meeting, and so hopefully they are come prepared. But

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Speaker 8: for Biden to offer something to McCarthy is probably a

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Speaker 8: non starter for McCarthy's base, and so that means he's

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Speaker 8: going to depend on Democrats, and that might mean he's

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Speaker 8: not going to have a speakership much longer. So it

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Speaker 8: is a big challenge all particularly I think for McCarthy.

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Speaker 2: Well, it's not like the president has popular opinion at

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Speaker 2: his back here, Lisa. Let's get into this poll for

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Speaker 2: a minute that we just referred to ABC News Washington Post.

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Speaker 2: This is two weeks into a reelection campaign, and it's

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Speaker 2: a new low. Approval rating dipped to thirty six percent,

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Speaker 2: just below his previous low of last year, while a

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Speaker 2: significantly higher percentage of people fifty six percent, disapprove of

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Speaker 2: the job the president has done so far. As you

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Speaker 2: probably heard, the numbers on the election are not good.

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Speaker 2: He actually loses to Donald Trump in the hypothetical head

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Speaker 2: to head. Here, Lisa, how much should he be reading

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Speaker 2: into this this far out?

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Speaker 9: I mean, he should be reading into it, but there's

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Speaker 9: no doubt about it, Joe. I mean, I guess the

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Speaker 9: good news is that there's not much further to fall.

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Speaker 9: But really there has got to be a way that

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Speaker 9: the White House can figure out how to thread the needle,

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Speaker 9: not only find themselves a winner as it comes to

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Speaker 9: the debt ceiling, but also jo This week is going

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Speaker 9: to be unbelievable. This is like, this is the super

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Speaker 9: Bowl of politics this week. Between sure it is debt

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Speaker 9: ceiling discussion and then Title forty two being potentially lifted.

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Speaker 9: With all of the stuff that's going on at the border,

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Speaker 9: the White House is looking, in the eyes of many

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Speaker 9: many people, just very weak and that platform as well

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Speaker 9: as it comes to that discussion, this is just really

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Speaker 9: going to be the kind of opportunity or the kind

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Speaker 9: of pitfall that really could make or break the White

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Speaker 9: House Genie.

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Speaker 2: The poll was conducted among a random national sample of

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Speaker 2: one thousand and six adults. Overall, results have a margin

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Speaker 2: of ara plus or minus three and a half percentage points.

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Speaker 2: As our political scientists at the table here, how does

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Speaker 2: this methodology hit you? Because it's making big headlines.

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Speaker 8: It is making huge headlines, and you know, I do

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Speaker 8: always say we should look at polls in the context

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Speaker 8: of many, many polls. This is one dip in if

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Speaker 8: you will, at a time. And as you mentioned, it's

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Speaker 8: a random sample of US adults. It is not registered voters,

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Speaker 8: nor is it likely voters. And so that's one thing

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Speaker 8: I think we have to pause on, which is that

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Speaker 8: if we are looking at this in the context of

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Speaker 8: an election, and I understand it's early for the pollsters

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Speaker 8: to be doing likely and registered, but if we're talking

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Speaker 8: about it as potentially telling us what might happen in

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Speaker 8: November twenty twenty four, then this is a little bit,

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Speaker 8: you know, something to take into account that these are

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Speaker 8: random US adults and not registered voters are likely votered.

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Speaker 8: On top of which the margin of error gets even

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Speaker 8: bigger to five point five when you look at the

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Speaker 8: samples of just Republicans and just Democrats, and that's a

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Speaker 8: fairly healthy margin. That means ten points essentially from where

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Speaker 8: we're getting a number thirty six percent meets forty six

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Speaker 8: percent or twenty six percent when you look at it

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Speaker 8: that way, So that's also a big switch.

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Speaker 2: All that said, Lisai, does this poll have enough credibility

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Speaker 2: for Joe Biden to worry?

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Speaker 9: I mean, I think it has to, right. I mean,

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Speaker 9: the problem here and Genie's absolutely right. I mean, there

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Speaker 9: is so much here that allows for you know, the

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Speaker 9: margin of error to really be what it is the

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Speaker 9: problem though, Joe is that we have been continually hearing

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Speaker 9: this over and over that there is a high level

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Speaker 9: of dissatisfaction, high level of frustration with the White House.

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Speaker 9: And if they're smart and they're looking at it, you know,

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Speaker 9: as a whole piece and a whole picture of how

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Speaker 9: the general public feels, then I think that it's illustrative

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Speaker 9: enough that they should use it as a resource and

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Speaker 9: as a tool to find out what are people caring

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Speaker 9: about and how is it that they're going to reach

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Speaker 9: them in order to get that number back to where

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Speaker 9: it really needs to be in order for him to

436
00:22:47,880 --> 00:22:48,560
Speaker 9: be successful.

437
00:22:49,040 --> 00:22:52,800
Speaker 2: The age issue looming large here in this research. Twenty

438
00:22:52,800 --> 00:22:56,280
Speaker 2: six percent say Joe Biden at eighty years old is

439
00:22:56,560 --> 00:22:59,720
Speaker 2: just too old for another term. Now, remember Donald Trump's

440
00:22:59,720 --> 00:23:03,159
Speaker 2: only four years younger than him, and forty three percent

441
00:23:03,400 --> 00:23:06,919
Speaker 2: say they're both too old. I mentioned Joe Biden answering

442
00:23:06,960 --> 00:23:10,000
Speaker 2: a question about this in his interview on MSNBC.

443
00:23:10,200 --> 00:23:12,840
Speaker 12: There's not a fortune five hundred company in the world

444
00:23:13,359 --> 00:23:18,879
Speaker 12: looking to hire a CEO in his eighties. So why

445
00:23:18,880 --> 00:23:21,800
Speaker 12: would an eighty two year old Joe Biden be the

446
00:23:21,920 --> 00:23:24,720
Speaker 12: right person for the most important job in the world.

447
00:23:25,080 --> 00:23:27,320
Speaker 13: Because I've required a hell of a lot of wisdom

448
00:23:28,320 --> 00:23:30,360
Speaker 13: and now more than the vast majority of people, I'm

449
00:23:30,359 --> 00:23:33,320
Speaker 13: more experienced than anybody's ever run for the office, and

450
00:23:33,359 --> 00:23:36,080
Speaker 13: I think I've proven myself to be honorable as well

451
00:23:36,200 --> 00:23:38,000
Speaker 13: as also effective.

452
00:23:38,080 --> 00:23:41,239
Speaker 2: From his conversation with Stephanie Rule, Genie, is that going

453
00:23:41,320 --> 00:23:43,360
Speaker 2: to work? Is that the answer for the next year

454
00:23:43,359 --> 00:23:44,000
Speaker 2: and change?

455
00:23:45,119 --> 00:23:47,439
Speaker 8: Yeah, that's the best he's going to do. His message

456
00:23:47,480 --> 00:23:49,440
Speaker 8: has been what he said to Stephanie Rule and then

457
00:23:49,560 --> 00:23:51,800
Speaker 8: watched me and judge me on my record. I think

458
00:23:51,840 --> 00:23:54,840
Speaker 8: the reality of what we're seeing this is a referendum

459
00:23:54,840 --> 00:23:57,680
Speaker 8: on Joe Biden. Very tough for him to pull this through,

460
00:23:57,840 --> 00:24:00,520
Speaker 8: But if it's a referendum on Donald Trump, very tough

461
00:24:00,520 --> 00:24:03,520
Speaker 8: for Donald Trump. So the goal here on both sides

462
00:24:03,760 --> 00:24:05,680
Speaker 8: is to point the finger at the other guy and say,

463
00:24:05,680 --> 00:24:08,480
Speaker 8: look at him, not me. And so that's the reality.

464
00:24:08,480 --> 00:24:10,920
Speaker 8: And to add to Lisa's super Bowl, we get Donald

465
00:24:10,960 --> 00:24:12,960
Speaker 8: Trump on CNN this week, which is going to be

466
00:24:13,000 --> 00:24:15,000
Speaker 8: in New Hampshire, which is going to be another part

467
00:24:15,000 --> 00:24:15,920
Speaker 8: of the big super Bowl.

468
00:24:16,760 --> 00:24:18,720
Speaker 2: Yeah, there's not enough time in the day, Lisa, But

469
00:24:18,760 --> 00:24:21,159
Speaker 2: if you have to answer this question one hundred more times,

470
00:24:21,560 --> 00:24:22,640
Speaker 2: was that the model.

471
00:24:25,160 --> 00:24:27,080
Speaker 9: For success for Joe's answer?

472
00:24:27,119 --> 00:24:28,760
Speaker 2: You mean, yeah, for Joe Biden exactly.

473
00:24:29,280 --> 00:24:33,800
Speaker 9: Uh, you know, I think we've we've heard this over

474
00:24:33,840 --> 00:24:35,600
Speaker 9: and over, but I do think that there is something

475
00:24:35,640 --> 00:24:38,080
Speaker 9: to the fact that these two are they're they're really

476
00:24:38,160 --> 00:24:40,600
Speaker 9: linked to one another. If one runs then and the

477
00:24:40,600 --> 00:24:44,280
Speaker 9: other runs, then really the age issue gets a race

478
00:24:44,440 --> 00:24:47,280
Speaker 9: to some degree because they're both there. They're up there, right.

479
00:24:48,320 --> 00:24:50,480
Speaker 9: But the other thing too is that you know, Biden

480
00:24:50,560 --> 00:24:53,200
Speaker 9: really has to he has to find a short answer.

481
00:24:53,000 --> 00:24:54,000
Speaker 4: And he has to move along.

482
00:24:54,280 --> 00:24:57,320
Speaker 9: Being the most experienced doesn't necessarily make you the most qualified.

483
00:24:57,359 --> 00:24:59,280
Speaker 9: If you're in your aims, right, I mean, you can

484
00:24:59,320 --> 00:25:01,320
Speaker 9: be qualified, but this is a job that really takes

485
00:25:01,320 --> 00:25:03,680
Speaker 9: a lot of stamina, and it takes a lot out

486
00:25:03,720 --> 00:25:06,960
Speaker 9: of you. And having a younger candidate is definitely, I

487
00:25:06,960 --> 00:25:09,360
Speaker 9: think desirable by many, many, many voters.

488
00:25:09,680 --> 00:25:12,400
Speaker 2: We've got more ahead with Lisa Kamussa Miller and Jeanie Schanzana.

489
00:25:12,400 --> 00:25:15,320
Speaker 2: We're also going to talk to Steve Dennis, Bloomberg congressional reporter,

490
00:25:15,320 --> 00:25:17,159
Speaker 2: who sat down a little while ago with Mitch mcconnag

491
00:25:17,160 --> 00:25:19,520
Speaker 2: will see what's going on inside his brain.

492
00:25:20,400 --> 00:25:23,879
Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us

493
00:25:23,920 --> 00:25:27,080
Speaker 1: live weekdays at one Eastern on Bloomberg dot com, the

494
00:25:27,160 --> 00:25:30,280
Speaker 1: iHeartRadio app, and the Bloomberg Business app, or listen on

495
00:25:30,320 --> 00:25:32,480
Speaker 1: demand wherever you get your podcasts.

496
00:25:33,440 --> 00:25:36,240
Speaker 2: But what about Mitch? You've probably heard that question asked

497
00:25:36,240 --> 00:25:38,600
Speaker 2: here on Bloomberg as we approached the X date. Could

498
00:25:38,680 --> 00:25:41,000
Speaker 2: the minority leader in the Senate end up being a

499
00:25:41,040 --> 00:25:44,399
Speaker 2: deal maker somehow on the debt ceiling swoop in at

500
00:25:44,400 --> 00:25:48,520
Speaker 2: the last minute, save everyone? He certainly has not been

501
00:25:48,560 --> 00:25:49,320
Speaker 2: sounding like it.

502
00:25:49,680 --> 00:25:55,200
Speaker 14: This agreement must be reached because we must never default,

503
00:25:56,240 --> 00:25:59,960
Speaker 14: and the agreement needs to be reached between the speaker

504
00:26:00,119 --> 00:26:01,960
Speaker 14: here and the president.

505
00:26:02,640 --> 00:26:06,879
Speaker 2: That was Mitch McConnell two weeks ago and Bloomberg Congressional

506
00:26:06,920 --> 00:26:09,480
Speaker 2: reporter Steve Dennis just sat down with him. The story,

507
00:26:09,480 --> 00:26:12,440
Speaker 2: in fact, just hit the terminal and he's with us now,

508
00:26:12,440 --> 00:26:15,760
Speaker 2: Steve Welcome. It appears Mitch McConnell is staying consistent here.

509
00:26:15,760 --> 00:26:16,479
Speaker 2: What did he tell you?

510
00:26:17,880 --> 00:26:21,960
Speaker 15: Yeah, I mean, he basically said that he has been

511
00:26:23,560 --> 00:26:29,240
Speaker 15: privately and publicly telling the President that he's not going

512
00:26:29,320 --> 00:26:32,000
Speaker 15: to bail him out this time, that he has to

513
00:26:32,119 --> 00:26:36,159
Speaker 15: negotiate with McCarthy. He basically he told me that in

514
00:26:36,240 --> 00:26:40,439
Speaker 15: twenty nineteen, Donald Trump faced a very similar situation. He

515
00:26:40,480 --> 00:26:43,160
Speaker 15: needed to raise the debt limit, and he told Trump

516
00:26:43,280 --> 00:26:46,600
Speaker 15: at that time that Trump needed to cut a deal

517
00:26:46,600 --> 00:26:49,160
Speaker 15: with Nancy Pelosi, and they did. They got a two

518
00:26:49,200 --> 00:26:53,439
Speaker 15: year spending cap deal, they raised the debt ceiling. He

519
00:26:53,520 --> 00:26:57,800
Speaker 15: sees this as the same situation and says Biden's got

520
00:26:57,800 --> 00:27:00,639
Speaker 15: to cut a deal with McCarthy. He did predict there

521
00:27:00,680 --> 00:27:03,719
Speaker 15: would be a deal. He said they were absolutely definitely

522
00:27:03,760 --> 00:27:07,359
Speaker 15: not going to default. And yet, you know, we have

523
00:27:08,000 --> 00:27:11,280
Speaker 15: a more difficult situation than I think anybody seemed if

524
00:27:11,560 --> 00:27:15,520
Speaker 15: in a long time, at least since twenty eleven. You know,

525
00:27:15,560 --> 00:27:17,920
Speaker 15: I asked him about twenty eleven when he did cut

526
00:27:17,960 --> 00:27:21,720
Speaker 15: a deal with then Vice President Joe Biden and He

527
00:27:21,840 --> 00:27:24,840
Speaker 15: said that the players are just too different this time around.

528
00:27:24,920 --> 00:27:28,480
Speaker 15: He thinks that this house is much more reluctant to

529
00:27:28,560 --> 00:27:33,720
Speaker 15: do a deal and would not accept a Senate negotiated

530
00:27:33,800 --> 00:27:37,040
Speaker 15: deal this time. And so maybe that changes, you know.

531
00:27:37,160 --> 00:27:39,840
Speaker 15: I mean, sometimes when markets start going haywire and you

532
00:27:39,920 --> 00:27:42,760
Speaker 15: set closer and closer to the XT date, maybe he'll

533
00:27:42,880 --> 00:27:46,399
Speaker 15: change his tune. But right now he's he is staying firm.

534
00:27:46,440 --> 00:27:48,160
Speaker 15: But this has to be done by McCarthy.

535
00:27:48,440 --> 00:27:51,320
Speaker 2: And this is great reporting here as we talked to

536
00:27:51,480 --> 00:27:55,160
Speaker 2: Stephen Dennis, just coming out of his interview with Mitch McConnell.

537
00:27:55,320 --> 00:27:57,920
Speaker 2: So what does that say about the meeting tomorrow? Mitch

538
00:27:58,320 --> 00:28:00,440
Speaker 2: goes to the other end of Pennsylvania Avenue just sits

539
00:28:00,480 --> 00:28:01,600
Speaker 2: quiet in the cabinet room.

540
00:28:02,800 --> 00:28:04,800
Speaker 15: Yeah, I mean, you know, he said that, you know,

541
00:28:05,480 --> 00:28:08,120
Speaker 15: when I pointed out that Democrats keep saying that they

542
00:28:08,200 --> 00:28:11,480
Speaker 15: hope he comes up with some kind of plan to

543
00:28:11,560 --> 00:28:15,080
Speaker 15: get get everybody out of this mess, he reached into

544
00:28:15,119 --> 00:28:19,439
Speaker 15: his pocket for this plan and he said, you know,

545
00:28:19,480 --> 00:28:22,320
Speaker 15: people seem to think I have this secret plan that

546
00:28:22,359 --> 00:28:24,040
Speaker 15: I'm going to you know, pop out and it's going

547
00:28:24,080 --> 00:28:27,160
Speaker 15: to solve everybody's problems. And there is no secret plan

548
00:28:27,280 --> 00:28:30,359
Speaker 15: basically that this you know, he's going to make the

549
00:28:30,400 --> 00:28:34,080
Speaker 15: same point in the meeting that he's made publicly now

550
00:28:34,119 --> 00:28:38,920
Speaker 15: for a while, that you know, the McCarthy's team and

551
00:28:39,160 --> 00:28:42,120
Speaker 15: the President's team just need to sit down and hash this.

552
00:28:42,200 --> 00:28:44,440
Speaker 11: Out, you know.

553
00:28:45,040 --> 00:28:47,280
Speaker 15: And he also signed you know, over the weekend, he

554
00:28:47,360 --> 00:28:50,080
Speaker 15: signed this letter with forty two other Republicans saying that

555
00:28:50,720 --> 00:28:54,440
Speaker 15: filibuster or clean dead limit bill. I asked him about

556
00:28:54,480 --> 00:28:57,400
Speaker 15: that and whether there was a risk the Republicans would

557
00:28:57,480 --> 00:29:01,680
Speaker 15: potentially own a default and themic crisis that would follow,

558
00:29:02,640 --> 00:29:04,880
Speaker 15: and then he, you know, he kind of shuts that

559
00:29:05,040 --> 00:29:08,240
Speaker 15: down by just insisting that a deal would be reached,

560
00:29:08,640 --> 00:29:12,760
Speaker 15: there would be no default, not now, not ever. But

561
00:29:12,800 --> 00:29:15,800
Speaker 15: that's you know, certainly putting a lot of confidence in

562
00:29:16,560 --> 00:29:21,760
Speaker 15: and the President buckling on his no negotiation stance on

563
00:29:21,800 --> 00:29:22,400
Speaker 15: the debt limit.

564
00:29:22,680 --> 00:29:23,000
Speaker 8: Wow.

565
00:29:23,680 --> 00:29:25,440
Speaker 2: Great work, Steven, and thank you for coming in to

566
00:29:25,440 --> 00:29:27,080
Speaker 2: talk to us about it. I'll point everyone to the

567
00:29:27,120 --> 00:29:30,240
Speaker 2: column on the terminal McConnell warrens he has no secret

568
00:29:30,240 --> 00:29:33,520
Speaker 2: plan to solve us debt impact. Great photo him in

569
00:29:33,560 --> 00:29:36,320
Speaker 2: the office too, as he spends time talking to our

570
00:29:36,360 --> 00:29:38,640
Speaker 2: own Steven Dennis. Let's reassemble the panel and get their

571
00:29:38,680 --> 00:29:42,440
Speaker 2: take on this. Genie Shanzo and Lisa Camuso Miller, Genie,

572
00:29:42,480 --> 00:29:44,400
Speaker 2: I don't know if Joe Biden thought maybe he'd make

573
00:29:44,440 --> 00:29:47,320
Speaker 2: eye contact across the table with Mitch tomorrow, that maybe

574
00:29:47,360 --> 00:29:49,720
Speaker 2: they would have a side meeting, that there might be

575
00:29:49,840 --> 00:29:51,840
Speaker 2: some other way to get around this. But he really

576
00:29:51,880 --> 00:29:54,800
Speaker 2: wants everyone to know he's not going to play that role.

577
00:29:56,160 --> 00:29:59,480
Speaker 8: Yeah, he's fairly. He's just McConnell is clearly saying, don't

578
00:29:59,520 --> 00:30:01,840
Speaker 8: look to me, Joe Biden, We're not going to go.

579
00:30:01,840 --> 00:30:03,880
Speaker 2: So does that make it harder or is he saving

580
00:30:03,920 --> 00:30:05,160
Speaker 2: us a little bit of time here?

581
00:30:06,360 --> 00:30:09,080
Speaker 8: Well, you know, I do think it makes it harder,

582
00:30:09,120 --> 00:30:12,080
Speaker 8: and I agree so much. And Steve's piece is so good.

583
00:30:12,560 --> 00:30:15,040
Speaker 8: You know. The reality is it was very different in

584
00:30:15,080 --> 00:30:17,320
Speaker 8: eleven with the players and the ability to get a

585
00:30:17,320 --> 00:30:20,200
Speaker 8: deal through the GOP house. The other reality is the

586
00:30:20,280 --> 00:30:24,000
Speaker 8: bailout in twenty eleven helped McConnell and helped his party

587
00:30:24,320 --> 00:30:27,440
Speaker 8: because they were convinced that they were going to be

588
00:30:27,640 --> 00:30:29,920
Speaker 8: hurt if they didn't get a deal. That is a

589
00:30:29,960 --> 00:30:32,120
Speaker 8: little different today, or a lot different as you look

590
00:30:32,160 --> 00:30:34,360
Speaker 8: around members of the GOP and the letter that he

591
00:30:34,440 --> 00:30:38,320
Speaker 8: mentioned with the forty three Senators say this very clearly,

592
00:30:38,640 --> 00:30:41,160
Speaker 8: which is that they believe that Biden is going to

593
00:30:41,200 --> 00:30:43,960
Speaker 8: experience and the Democrats are going to be experiencing the

594
00:30:44,040 --> 00:30:47,120
Speaker 8: hurt this time. So he's got little incentive for a deal,

595
00:30:47,320 --> 00:30:49,480
Speaker 8: and that makes this very different. Now, he may swoop

596
00:30:49,520 --> 00:30:51,720
Speaker 8: in at the last minute. People are talking about McConnell.

597
00:30:51,800 --> 00:30:54,360
Speaker 8: Time may come, you know, to pass at some point,

598
00:30:54,640 --> 00:30:56,959
Speaker 8: But right now he doesn't see this as you know,

599
00:30:57,000 --> 00:30:59,880
Speaker 8: to his or the Republican's advantage. He's better off, in

600
00:31:00,080 --> 00:31:01,880
Speaker 8: his mind's staying quiet. And I think that's what we're

601
00:31:01,880 --> 00:31:02,840
Speaker 8: going to see on Tuesday.

602
00:31:03,080 --> 00:31:05,840
Speaker 2: So, Lisa, is this Mitch McConnell's saying to Joe Biden. Look,

603
00:31:05,880 --> 00:31:08,240
Speaker 2: you know what, we're too old, guys, and the way

604
00:31:08,280 --> 00:31:10,440
Speaker 2: we used to do business does not work for this

605
00:31:10,520 --> 00:31:14,760
Speaker 2: new House majority that Kevin McCarthy is dealing with. Is

606
00:31:14,760 --> 00:31:15,960
Speaker 2: that the message here.

607
00:31:16,920 --> 00:31:18,240
Speaker 7: No way, no way.

608
00:31:18,680 --> 00:31:21,720
Speaker 11: I think that the best part about Mitch McConnell.

609
00:31:21,400 --> 00:31:24,760
Speaker 9: Is that he always, while he while I know Steve

610
00:31:24,840 --> 00:31:26,600
Speaker 9: is right and I know that McConnell does not have

611
00:31:26,640 --> 00:31:30,800
Speaker 9: a plan, he always he always sees around the corner

612
00:31:30,880 --> 00:31:33,160
Speaker 9: quicker than anyone else. The fact that he is saying

613
00:31:33,200 --> 00:31:35,959
Speaker 9: that we are, that we are not going to default,

614
00:31:36,000 --> 00:31:38,240
Speaker 9: that we will come to a decision. It tells me

615
00:31:38,280 --> 00:31:41,040
Speaker 9: that he has confidence that this is going to be done,

616
00:31:41,240 --> 00:31:45,400
Speaker 9: and that to me, I never ever underestimate Mitch McConnell.

617
00:31:45,400 --> 00:31:47,560
Speaker 9: I always know that he knows the best of what's

618
00:31:47,600 --> 00:31:50,920
Speaker 9: going on politically, whether people like it or not. But

619
00:31:51,000 --> 00:31:52,880
Speaker 9: I do also think this is true. I think that

620
00:31:53,080 --> 00:31:57,040
Speaker 9: McConnell knows that if McCarthy can strike a deal and

621
00:31:57,080 --> 00:31:59,040
Speaker 9: that something can get done in the House, that he

622
00:31:59,200 --> 00:32:03,800
Speaker 9: knows that his conference will will come along and will

623
00:32:03,840 --> 00:32:06,320
Speaker 9: go along with what the agreement is. And so that

624
00:32:06,480 --> 00:32:08,719
Speaker 9: I think is how he sees it. He sees it

625
00:32:08,760 --> 00:32:11,800
Speaker 9: more difficult to get through the House because there are

626
00:32:11,840 --> 00:32:14,280
Speaker 9: so many hardliners there, and that if they can come

627
00:32:14,320 --> 00:32:17,880
Speaker 9: to an agreement, then the Senate will go along. So absolutely,

628
00:32:18,040 --> 00:32:20,680
Speaker 9: no way. I'd never underestimate him. He always seems to

629
00:32:20,760 --> 00:32:23,240
Speaker 9: know three steps before the rest of us.

630
00:32:23,320 --> 00:32:27,080
Speaker 2: So there's still time for McConnell's time, is what you're saying. Yeah,

631
00:32:27,160 --> 00:32:29,840
Speaker 2: I think so, Genie, what do you make of that?

632
00:32:30,000 --> 00:32:32,160
Speaker 2: And what did it tell you when he signed that

633
00:32:32,240 --> 00:32:33,120
Speaker 2: letter last weekend?

634
00:32:34,760 --> 00:32:36,680
Speaker 8: You know, I think it told us that this thing

635
00:32:36,760 --> 00:32:39,200
Speaker 8: is not going to be over on Tuesday or anytime soon.

636
00:32:39,360 --> 00:32:42,040
Speaker 8: And so yeah, I do agree with Lisa that he

637
00:32:42,160 --> 00:32:44,720
Speaker 8: is very good at reading the room. He knows what's coming.

638
00:32:44,920 --> 00:32:46,840
Speaker 8: But I also think we have to pay attention to

639
00:32:46,880 --> 00:32:49,720
Speaker 8: the calendar. The US economy, the US currency is being

640
00:32:49,800 --> 00:32:53,120
Speaker 8: hurt now and that is a problem. And so regardless

641
00:32:53,160 --> 00:32:55,800
Speaker 8: of what he sees coming forward, they should act quickly,

642
00:32:55,800 --> 00:32:56,960
Speaker 8: and he's not prepared to do that.

643
00:32:58,320 --> 00:33:00,400
Speaker 2: Genie Shanzo and Lisa Kumuso Miller.

644
00:33:01,400 --> 00:33:04,800
Speaker 1: You're listening to The Bloomberg Sound on podcast. Catch the

645
00:33:04,800 --> 00:33:08,680
Speaker 1: program live weekdays at one Eastern on Bloomberg Radio, the

646
00:33:08,760 --> 00:33:12,080
Speaker 1: tune in app, Bloomberg dot Com, and the Bloomberg Business App.

647
00:33:12,240 --> 00:33:15,080
Speaker 1: You can also listen live on Amazon Alexa from our

648
00:33:15,120 --> 00:33:19,560
Speaker 1: flagship New York station, Just say Alexa play Bloomberg eleven thirty.

649
00:33:20,880 --> 00:33:21,120
Speaker 8: Thanks.

650
00:33:21,120 --> 00:33:23,840
Speaker 2: I'm Phil Matthew along with Kaylee Lines in Washington, and

651
00:33:23,920 --> 00:33:25,920
Speaker 2: it looks like we've got some breaking news here. Kaylee,

652
00:33:25,960 --> 00:33:27,440
Speaker 2: it's great to see you, by the way, Thanks for

653
00:33:27,520 --> 00:33:30,000
Speaker 2: keeping everything together while I was gone for a couple

654
00:33:30,000 --> 00:33:32,280
Speaker 2: of days, and thanks for coming back today to talk

655
00:33:32,280 --> 00:33:34,479
Speaker 2: about real stuff. We've got our rise on the banks,

656
00:33:34,480 --> 00:33:35,400
Speaker 2: and so does the fifth.

657
00:33:35,840 --> 00:33:39,120
Speaker 16: Yeah, we just got the latest Senior Loan Officer Opinion

658
00:33:39,200 --> 00:33:41,959
Speaker 16: survey for the first quarter, So this went through the

659
00:33:42,080 --> 00:33:44,320
Speaker 16: end of March, March of course being the month that

660
00:33:44,360 --> 00:33:46,440
Speaker 16: brought all the turmoil and banks, and it basically gives

661
00:33:46,520 --> 00:33:49,080
Speaker 16: us a read on what banks are doing in terms

662
00:33:49,320 --> 00:33:52,520
Speaker 16: of lending. What this survey shows is that across all

663
00:33:52,600 --> 00:33:56,760
Speaker 16: sorts of benchmarks, including loans to businesses, on balance, banks

664
00:33:56,800 --> 00:34:00,840
Speaker 16: have seen tighter standards and weaker demand for mamertional industrial,

665
00:34:00,840 --> 00:34:03,040
Speaker 16: which is C and I loans to large and middle

666
00:34:03,080 --> 00:34:05,880
Speaker 16: market firms. Then when you look at loans to households,

667
00:34:06,200 --> 00:34:09,920
Speaker 16: banks also are reporting that lending standards tightened, including across

668
00:34:09,960 --> 00:34:13,360
Speaker 16: all categories of residential real estate. So this really speaks

669
00:34:13,520 --> 00:34:15,480
Speaker 16: speaks to what we all were talking about in the

670
00:34:15,520 --> 00:34:18,399
Speaker 16: aftermath of these bank failures, whether or not banks we're

671
00:34:18,440 --> 00:34:21,440
Speaker 16: going to start just lending less as a result, and

672
00:34:21,560 --> 00:34:24,160
Speaker 16: especially for these smaller banks, they are really the bedrock

673
00:34:24,520 --> 00:34:27,480
Speaker 16: of lending in the US economy, really fueling a lot

674
00:34:27,480 --> 00:34:30,640
Speaker 16: of that economic activity by giving out these loans, especially

675
00:34:30,680 --> 00:34:33,319
Speaker 16: to businesses. So this idea of them pulling back kind

676
00:34:33,360 --> 00:34:36,520
Speaker 16: of feeds into the narrative around a potential credit crunch

677
00:34:36,560 --> 00:34:39,120
Speaker 16: in the US economy. One thing I would also add, Joe,

678
00:34:39,480 --> 00:34:41,399
Speaker 16: is that the FED had already seen this data when

679
00:34:41,400 --> 00:34:44,240
Speaker 16: it made its decision last week, and Chairman Palaff actually

680
00:34:44,280 --> 00:34:47,359
Speaker 16: referenced it in his press conference last one day and staid, Yeah,

681
00:34:47,400 --> 00:34:50,880
Speaker 16: it's going to show lending standards have tightened. And then

682
00:34:50,880 --> 00:34:54,799
Speaker 16: the demand part, of course, which is the way right, Well,

683
00:34:54,840 --> 00:34:57,080
Speaker 16: this is what the FED wants to achieve in theory.

684
00:34:57,120 --> 00:35:00,560
Speaker 16: This is the transmission mechanism of monetary policy. You raise

685
00:35:00,600 --> 00:35:03,160
Speaker 16: reads and then you get credit conditions in the economy

686
00:35:03,160 --> 00:35:06,000
Speaker 16: to titan so that things slowed down. It just becomes

687
00:35:06,000 --> 00:35:08,279
Speaker 16: a question of the pace of that slow down. Do

688
00:35:08,320 --> 00:35:11,160
Speaker 16: we see it choking off too quickly where then no

689
00:35:11,200 --> 00:35:14,640
Speaker 16: one can get access to loans. Businesses then can't you know,

690
00:35:14,680 --> 00:35:17,000
Speaker 16: grow and develop and do all of these things. So

691
00:35:17,040 --> 00:35:19,600
Speaker 16: it's a very fine line that the FED has to

692
00:35:19,760 --> 00:35:23,600
Speaker 16: walk here, because you don't want necessarily an outright credit crunch,

693
00:35:23,920 --> 00:35:26,160
Speaker 16: even if to a certain extent you do want a

694
00:35:26,200 --> 00:35:27,279
Speaker 16: credit pullback.

695
00:35:27,440 --> 00:35:30,760
Speaker 2: Wow, there's a lot there. You just start wondering if

696
00:35:30,800 --> 00:35:33,439
Speaker 2: we're actually there. You know, you mentioned the interest rate hike.

697
00:35:33,480 --> 00:35:35,960
Speaker 2: Does that mean that we're there or potentially overshot, or

698
00:35:35,960 --> 00:35:37,879
Speaker 2: are they really going to think again about doing something

699
00:35:37,920 --> 00:35:41,719
Speaker 2: at the next meeting. I suspect mckmilvaney's got some thoughts

700
00:35:41,760 --> 00:35:42,200
Speaker 2: on all of this.

701
00:35:42,360 --> 00:35:43,160
Speaker 11: Oh, I'm sure he does.

702
00:35:43,280 --> 00:35:46,400
Speaker 2: The former OMB director, former acting White House Chief of staff,

703
00:35:46,440 --> 00:35:49,759
Speaker 2: and somehow they always drop former member of Congress. I

704
00:35:49,840 --> 00:35:51,919
Speaker 2: try to remind people of that. Mick, welcome, It's great

705
00:35:51,920 --> 00:35:53,960
Speaker 2: to have you back. It must be Monday, as we

706
00:35:54,000 --> 00:35:56,560
Speaker 2: spend time with McK mulvaney each week at this time.

707
00:35:58,600 --> 00:36:01,000
Speaker 2: Did they make the FED? The bank failures make the

708
00:36:01,000 --> 00:36:04,040
Speaker 2: Fed's job easier here, Mike, or more complicated?

709
00:36:05,360 --> 00:36:08,120
Speaker 10: Well, probably a little bit more complicated, just because it's

710
00:36:08,120 --> 00:36:11,200
Speaker 10: another variable. But your point that you and Tayley just

711
00:36:11,239 --> 00:36:14,000
Speaker 10: made is right, which is, to a certain extent, this

712
00:36:14,040 --> 00:36:16,560
Speaker 10: is what's supposed to happen, right, It feels right. When

713
00:36:16,560 --> 00:36:18,720
Speaker 10: winter trates go up, there's going to be less lending.

714
00:36:18,760 --> 00:36:21,520
Speaker 10: That's that's part of demand destructions, part of how you

715
00:36:21,560 --> 00:36:25,000
Speaker 10: handle inflation. So this is sort of going by the textbook.

716
00:36:25,040 --> 00:36:27,000
Speaker 10: But I think the larger question you've raised is the

717
00:36:27,040 --> 00:36:29,920
Speaker 10: better one, which is, why do we have any confidence

718
00:36:29,960 --> 00:36:32,560
Speaker 10: in the FED being able to time this correctly. Why

719
00:36:33,000 --> 00:36:34,719
Speaker 10: why do we have the confidence that they've getting at

720
00:36:34,760 --> 00:36:37,279
Speaker 10: exactly right when they've been wrong on so many things

721
00:36:37,320 --> 00:36:39,319
Speaker 10: up to this point, going back to the days of

722
00:36:39,320 --> 00:36:42,200
Speaker 10: transitory inflation. So look, there really really smart people, and

723
00:36:42,239 --> 00:36:45,360
Speaker 10: I get that, but this is a really, really complex system,

724
00:36:45,640 --> 00:36:48,359
Speaker 10: and why we think that just because the FED does

725
00:36:48,360 --> 00:36:50,000
Speaker 10: something it's right is beyond me.

726
00:36:51,280 --> 00:36:54,319
Speaker 16: Yeah, it's definitely a difficult position that Sherman Powell and

727
00:36:54,360 --> 00:36:56,480
Speaker 16: his colleagues are in. I would note also part of

728
00:36:56,480 --> 00:36:59,040
Speaker 16: the survey, and it's not just about the bank's tightening standards,

729
00:36:59,080 --> 00:37:01,120
Speaker 16: but it's also about demand for those loans, and the

730
00:37:01,120 --> 00:37:03,480
Speaker 16: FED says that we've seen the broadest share of banks

731
00:37:03,520 --> 00:37:06,520
Speaker 16: with weaker loan demand since two thousand and nine, which

732
00:37:06,560 --> 00:37:10,200
Speaker 16: really speaks to this idea of a slowing economy. The question,

733
00:37:10,320 --> 00:37:13,800
Speaker 16: I guess, Mick, is when this gets more politically difficult,

734
00:37:13,800 --> 00:37:16,719
Speaker 16: Because I ask lawmakers in those affiliated with the White

735
00:37:16,719 --> 00:37:18,480
Speaker 16: House all the time, you know, like, would you like

736
00:37:18,520 --> 00:37:20,360
Speaker 16: to see the FED turnaround start cutting here? What do

737
00:37:20,360 --> 00:37:22,520
Speaker 16: you think of FED policy? Many of them are reluctant

738
00:37:22,800 --> 00:37:25,680
Speaker 16: to comment because they want the FED to maintain its independence.

739
00:37:26,000 --> 00:37:27,120
Speaker 16: Can that last forever?

740
00:37:28,960 --> 00:37:29,319
Speaker 7: I hope?

741
00:37:29,360 --> 00:37:32,440
Speaker 10: So because once we start politicizing credit, which has already

742
00:37:32,480 --> 00:37:34,959
Speaker 10: started to happen a little bit, you start to get

743
00:37:35,200 --> 00:37:38,759
Speaker 10: in dangerous zones. Right. The politicians sort of want the

744
00:37:38,800 --> 00:37:42,239
Speaker 10: FED to be independent, but they also sort of want

745
00:37:42,239 --> 00:37:44,040
Speaker 10: the FED to listen to them. I mean, this goes back.

746
00:37:44,080 --> 00:37:46,840
Speaker 10: This is not new, and it's certainly not Republican or Democrat,

747
00:37:46,840 --> 00:37:49,680
Speaker 10: and that Ronald Reagan was a little worried about, you know,

748
00:37:49,719 --> 00:37:52,880
Speaker 10: the recession that Bulker was creating a generation to go.

749
00:37:53,080 --> 00:37:55,960
Speaker 10: So yeah, politicians don't like it when they're in office

750
00:37:56,280 --> 00:37:57,919
Speaker 10: when the FED has to come in and raise raids

751
00:37:57,920 --> 00:38:00,600
Speaker 10: because it does tend to slow down the growth in

752
00:38:00,640 --> 00:38:03,799
Speaker 10: the ecomomy. Of course that's by design. So I do

753
00:38:03,880 --> 00:38:05,759
Speaker 10: worry about the Fed's independence long term. There was a

754
00:38:05,800 --> 00:38:09,000
Speaker 10: statement I think out signed by a bunch of Democrat

755
00:38:09,080 --> 00:38:11,919
Speaker 10: lawmakers last week calling on them to stop raising interest

756
00:38:12,000 --> 00:38:15,359
Speaker 10: rates and so forth. You'd never know the impact that

757
00:38:15,360 --> 00:38:20,719
Speaker 10: that has. But there are some times when politicians love

758
00:38:20,800 --> 00:38:22,759
Speaker 10: that FED being independent, but at the same time they

759
00:38:23,280 --> 00:38:24,560
Speaker 10: might want them to do what they want him to

760
00:38:24,600 --> 00:38:25,680
Speaker 10: do to help them get re elected.

761
00:38:26,239 --> 00:38:27,719
Speaker 2: I don't think I've ever asked you what used to

762
00:38:27,719 --> 00:38:30,080
Speaker 2: go through your mind Mick when you would wake up

763
00:38:30,080 --> 00:38:31,759
Speaker 2: and see that Donald Trump was tweeting at J.

764
00:38:31,920 --> 00:38:32,280
Speaker 1: Powell.

765
00:38:35,040 --> 00:38:42,200
Speaker 10: I didn't follow the president's tweets. My god, you know, yeah, no, actually,

766
00:38:42,320 --> 00:38:44,600
Speaker 10: I know this sounds awful. I had somebody to do

767
00:38:44,640 --> 00:38:48,040
Speaker 10: that because it was almost a full time job. So

768
00:38:48,239 --> 00:38:50,719
Speaker 10: we walked in the office and what he tweeted, I'm like, no,

769
00:38:50,800 --> 00:38:53,640
Speaker 10: thank you, I have But yeah, we worried. I worried

770
00:38:53,640 --> 00:38:56,680
Speaker 10: about it a little bit. I worried about the inference

771
00:38:57,280 --> 00:39:00,720
Speaker 10: that we were trying to sort of influence the the FED.

772
00:39:01,080 --> 00:39:04,040
Speaker 10: But face that Trump was no different than anybody else.

773
00:39:04,080 --> 00:39:06,360
Speaker 10: Janet Yellen is still meeting with Paul every single I

774
00:39:06,360 --> 00:39:09,120
Speaker 10: think it's once a month, and you got to believe

775
00:39:09,239 --> 00:39:14,440
Speaker 10: that she's trying to sort of get her parties agenda,

776
00:39:14,680 --> 00:39:16,359
Speaker 10: you know, in front of him. That just makes sense.

777
00:39:16,360 --> 00:39:18,799
Speaker 10: It's human nature, especially with Janet Yellen, who used to

778
00:39:18,840 --> 00:39:21,760
Speaker 10: be in that position. The better question is was Yellen

779
00:39:21,840 --> 00:39:23,799
Speaker 10: really independent when she was there in light of the

780
00:39:23,840 --> 00:39:26,680
Speaker 10: fact she's later on a political appointee of the Biden administration.

781
00:39:26,760 --> 00:39:28,839
Speaker 10: But that question, that was a.

782
00:39:28,880 --> 00:39:31,680
Speaker 2: Very effective answer. He spun that right around. McK maulvaney,

783
00:39:31,719 --> 00:39:32,680
Speaker 2: Ladies and gentlemen.

784
00:39:33,160 --> 00:39:35,399
Speaker 10: That's not my first interview, Joe.

785
00:39:36,000 --> 00:39:37,560
Speaker 16: Well, we know Janet Yellen has had to do a

786
00:39:37,560 --> 00:39:40,759
Speaker 16: fair share of interviews as well lately, and a lot

787
00:39:40,760 --> 00:39:43,000
Speaker 16: of them center around the dead ceiling, including you know

788
00:39:43,080 --> 00:39:45,120
Speaker 16: this weekend when she was speaking on one of the

789
00:39:45,160 --> 00:39:48,200
Speaker 16: Sunday shows, just talking about what the options are here,

790
00:39:48,280 --> 00:39:51,040
Speaker 16: I mean, talk about complicating the puzzle as it relates.

791
00:39:50,719 --> 00:39:52,640
Speaker 11: To the US economy, what the Fed is doing.

792
00:39:52,480 --> 00:39:55,839
Speaker 16: The looming potential of a default or getting close to

793
00:39:55,920 --> 00:39:59,080
Speaker 16: it just becomes more and more pression every single day,

794
00:39:59,160 --> 00:40:01,520
Speaker 16: especially as we build up to this meeting tomorrow at

795
00:40:01,520 --> 00:40:05,200
Speaker 16: the White House between President Biden and congressional leaders. Look,

796
00:40:05,200 --> 00:40:07,000
Speaker 16: you've been in the Oval Office. I'm sure you've sat

797
00:40:07,040 --> 00:40:09,800
Speaker 16: in your fair share of meetings. How do you expect

798
00:40:09,800 --> 00:40:10,920
Speaker 16: this to go down tomorrow?

799
00:40:11,719 --> 00:40:12,000
Speaker 7: Oh?

800
00:40:12,200 --> 00:40:16,120
Speaker 10: Scripted? Unfortunately, pretty scripted. I hope that's not the case.

801
00:40:16,640 --> 00:40:18,840
Speaker 10: I hope that there is a free flow of ideas

802
00:40:18,840 --> 00:40:20,719
Speaker 10: and that everybody on both sides of the equation is

803
00:40:20,760 --> 00:40:23,239
Speaker 10: willing to come in and chat. If they're coming in

804
00:40:23,280 --> 00:40:25,640
Speaker 10: there to sort of get their talking points together for

805
00:40:25,760 --> 00:40:29,319
Speaker 10: their their their statements immediately afterwards, when we call them

806
00:40:29,400 --> 00:40:31,399
Speaker 10: going to the sticks. When you leave the White House

807
00:40:31,400 --> 00:40:33,000
Speaker 10: and go and talk in front of the microphones and

808
00:40:33,040 --> 00:40:36,440
Speaker 10: so forth. You know, are they are both sides just

809
00:40:36,600 --> 00:40:40,520
Speaker 10: interested in campaigning here or are they actually coming down

810
00:40:41,600 --> 00:40:44,040
Speaker 10: with the attitude of having a discussion. You have to

811
00:40:44,080 --> 00:40:46,640
Speaker 10: give Kevin McCarthy credit. He did something that no one

812
00:40:46,680 --> 00:40:48,560
Speaker 10: thought he could do. He passed a bill to raise

813
00:40:48,600 --> 00:40:51,000
Speaker 10: the debt scene. And you can criticize it, and people

814
00:40:51,080 --> 00:40:52,960
Speaker 10: will from all sides. It doesn't enough, it doesn't do

815
00:40:53,080 --> 00:40:55,160
Speaker 10: too much, you know, or it doesn't do enough, et cetera.

816
00:40:55,280 --> 00:40:57,279
Speaker 10: But he did pass a bill, and I got to

817
00:40:57,320 --> 00:41:01,200
Speaker 10: think that's his opening position in the negotiations tomorrow. In

818
00:41:01,239 --> 00:41:03,319
Speaker 10: these discussions, call them what you want to, which is, look,

819
00:41:04,000 --> 00:41:05,759
Speaker 10: of all the people sitting around the table, the only

820
00:41:05,840 --> 00:41:08,239
Speaker 10: person who's passed the bill is me. So please don't

821
00:41:08,280 --> 00:41:10,680
Speaker 10: ask me to negotiate against myself. Tell me what you

822
00:41:10,760 --> 00:41:13,520
Speaker 10: think you can pass. Because keep in mind, forty three

823
00:41:13,719 --> 00:41:16,280
Speaker 10: Republican senators just signed a letter saying that they support

824
00:41:16,320 --> 00:41:18,480
Speaker 10: the House position and they won't support a clean debt

825
00:41:18,520 --> 00:41:21,160
Speaker 10: selling increase. So I think it's fair to ask the Senate,

826
00:41:21,560 --> 00:41:23,640
Speaker 10: you know, what's your opening bit because ours is on

827
00:41:23,719 --> 00:41:24,440
Speaker 10: the table and.

828
00:41:24,560 --> 00:41:27,040
Speaker 2: Minch McConnell just told Bloomberg that he's not there to

829
00:41:27,080 --> 00:41:29,320
Speaker 2: save the day, that this has to come down to

830
00:41:29,440 --> 00:41:32,120
Speaker 2: an agreement between Kevin McCarthy and Joe Biden. Whether you

831
00:41:32,239 --> 00:41:34,920
Speaker 2: agree with that, and maybe he changes his tune at

832
00:41:34,960 --> 00:41:38,320
Speaker 2: the last minute. Here, Nick, it sounds to me like

833
00:41:38,400 --> 00:41:40,959
Speaker 2: if this is a scripted meeting that amounts to very little,

834
00:41:41,040 --> 00:41:42,840
Speaker 2: then Kevin McCarthy's going to come out and bash the

835
00:41:42,920 --> 00:41:46,000
Speaker 2: president at the sticks as you mentioned when he talks

836
00:41:46,000 --> 00:41:49,080
Speaker 2: to reporters at the stakeout in the driveway. Or would

837
00:41:49,120 --> 00:41:52,600
Speaker 2: it be better off that he come out speak optimistically,

838
00:41:52,680 --> 00:41:55,040
Speaker 2: say that we're going to avoid a default, this was

839
00:41:55,080 --> 00:41:57,759
Speaker 2: a very productive session, and actually take credit for it.

840
00:41:58,960 --> 00:42:00,920
Speaker 10: It'd be interesting to walk watch that because you're going

841
00:42:00,960 --> 00:42:02,759
Speaker 10: to get a sense in the first thirty seconds when

842
00:42:02,840 --> 00:42:05,480
Speaker 10: Kevin comes out as to how the meeting went, and

843
00:42:05,560 --> 00:42:07,320
Speaker 10: if it's the same talking points, it means it was

844
00:42:07,360 --> 00:42:10,439
Speaker 10: heavily scripted. If he talks like you just mentioned about

845
00:42:10,480 --> 00:42:12,279
Speaker 10: how we you know, made some progress, et cetera, cetera,

846
00:42:12,360 --> 00:42:15,479
Speaker 10: that would be insightful. But the most insightful thing, because

847
00:42:15,480 --> 00:42:17,239
Speaker 10: we used to do this from time to time, is

848
00:42:17,320 --> 00:42:20,600
Speaker 10: if they skip the press altogether. If the meeting goes really,

849
00:42:20,719 --> 00:42:22,879
Speaker 10: really well, you might go to the sticks and say

850
00:42:22,960 --> 00:42:25,520
Speaker 10: how well it went. But oftentimes, if we thought we

851
00:42:25,640 --> 00:42:30,640
Speaker 10: had a really good rapport with whoever was in there, Republican, Democrat, House, Senate, whatever,

852
00:42:31,080 --> 00:42:32,919
Speaker 10: we might say, look, you know, maybe don't go straight

853
00:42:32,960 --> 00:42:34,800
Speaker 10: to the press. We'll put out a joint statement later on.

854
00:42:34,920 --> 00:42:37,520
Speaker 10: So we're curious to see that not only the attitude

855
00:42:37,640 --> 00:42:39,480
Speaker 10: in that in that press conference or that that that

856
00:42:39,680 --> 00:42:41,879
Speaker 10: that appearance, but whether or not it happens at all.

857
00:42:42,680 --> 00:42:44,759
Speaker 16: Well, it kind of raises a question of what will

858
00:42:44,840 --> 00:42:47,960
Speaker 16: define the success of this meeting. What can both sides

859
00:42:48,040 --> 00:42:51,480
Speaker 16: walk away with and still claim they got something out

860
00:42:51,520 --> 00:42:51,680
Speaker 16: of it?

861
00:42:54,400 --> 00:42:57,920
Speaker 10: Will Kevin wins by virtue of any negotiation, because I

862
00:42:57,960 --> 00:43:01,239
Speaker 10: think anything alse very beginning exactly, just anything, even if

863
00:43:01,239 --> 00:43:03,200
Speaker 10: they come in and say, look, we're not we're not

864
00:43:03,280 --> 00:43:04,920
Speaker 10: going to go to share the debt ceiling, but we

865
00:43:05,040 --> 00:43:08,239
Speaker 10: will negotiate with you on the next year spending bill.

866
00:43:08,680 --> 00:43:12,040
Speaker 10: That's a negotiation, right, and as long as you end

867
00:43:12,160 --> 00:43:13,680
Speaker 10: up at the end of the day with something that

868
00:43:13,760 --> 00:43:14,480
Speaker 10: can pass the House.

869
00:43:14,600 --> 00:43:17,000
Speaker 16: But isn't that what the President has been saying, because

870
00:43:17,000 --> 00:43:18,719
Speaker 16: that he won't negotiate on the debt ceiling, he will

871
00:43:18,800 --> 00:43:19,800
Speaker 16: negotiate on the budget.

872
00:43:20,520 --> 00:43:22,799
Speaker 10: And my question is what's the difference between the two things.

873
00:43:23,280 --> 00:43:25,799
Speaker 10: You know, it's a negotiation, and the lines are going

874
00:43:25,840 --> 00:43:27,640
Speaker 10: to be blurred. Yes, you've got a June date, which

875
00:43:27,800 --> 00:43:30,359
Speaker 10: I still don't believe, and I told you folks several

876
00:43:30,400 --> 00:43:32,800
Speaker 10: times before I thought that date was too early. So

877
00:43:32,880 --> 00:43:35,040
Speaker 10: I don't think the time pressure is there. But as

878
00:43:35,080 --> 00:43:37,960
Speaker 10: it moves closer and closer to September, which is when

879
00:43:37,960 --> 00:43:41,080
Speaker 10: the funding bills are due, in the lines get blurred

880
00:43:41,120 --> 00:43:44,000
Speaker 10: between a debt ceiling and a and a budget an

881
00:43:44,000 --> 00:43:45,280
Speaker 10: expenditure's bill appropriate.

882
00:43:45,320 --> 00:43:47,160
Speaker 2: The idea was though, that there was supposed to be

883
00:43:47,280 --> 00:43:49,279
Speaker 2: some sunlight in between the two, right like, as long

884
00:43:49,320 --> 00:43:51,759
Speaker 2: as as long as we know we're negotiating, then maybe

885
00:43:51,800 --> 00:43:54,399
Speaker 2: we can with the other hand, deal with the debt limit.

886
00:43:54,480 --> 00:43:57,160
Speaker 2: But he was this president said he would not tie

887
00:43:57,239 --> 00:44:00,200
Speaker 2: the two together. So both sides need to come out

888
00:44:00,239 --> 00:44:01,880
Speaker 2: looking like they did this the way they wanted. Right,

889
00:44:01,920 --> 00:44:03,600
Speaker 2: there's there's got to be a win for both.

890
00:44:04,000 --> 00:44:05,520
Speaker 10: And you've got to find a way to say face

891
00:44:05,920 --> 00:44:08,600
Speaker 10: you can't. You know you can't. And that's why for

892
00:44:08,960 --> 00:44:11,240
Speaker 10: the Biden team to come out and say we're absolutely

893
00:44:11,280 --> 00:44:15,120
Speaker 10: not negotiating. That's just not that's historically indefensible that the

894
00:44:15,239 --> 00:44:17,640
Speaker 10: discussions around the debt ceiling in the in the in

895
00:44:17,760 --> 00:44:20,440
Speaker 10: the nineteen nineties led to the bill's budget agreement. There

896
00:44:20,520 --> 00:44:23,480
Speaker 10: was an agreement in twenty seventeen to raise spending in

897
00:44:23,560 --> 00:44:26,040
Speaker 10: the Democrats when the Trump was in office and the

898
00:44:26,080 --> 00:44:28,720
Speaker 10: Democrats controlled the cards in the House and the Senate.

899
00:44:28,840 --> 00:44:31,520
Speaker 10: So there's always a negotiation that that's not a tenable

900
00:44:31,560 --> 00:44:34,440
Speaker 10: position to take about. You know, it's no negotiation at all.

901
00:44:34,520 --> 00:44:36,840
Speaker 10: So my guess is there will be a negotiation of

902
00:44:36,920 --> 00:44:38,560
Speaker 10: you up to Biden's team to try and spin that

903
00:44:38,640 --> 00:44:39,759
Speaker 10: to make it look like there wasn't.

904
00:44:40,520 --> 00:44:43,120
Speaker 16: Well, I guess there's also a question of what happens

905
00:44:43,600 --> 00:44:47,080
Speaker 16: if President Biden does say he is willing to negotiate.

906
00:44:47,239 --> 00:44:49,759
Speaker 16: Negotiation by its nature means there's going to be some

907
00:44:49,880 --> 00:44:51,480
Speaker 16: give and take. And yet we know that in the

908
00:44:51,520 --> 00:44:53,680
Speaker 16: bill that McCarthy was able to pass, he had to

909
00:44:54,000 --> 00:44:56,040
Speaker 16: meet a lot of demands from the different factions of

910
00:44:56,120 --> 00:44:58,120
Speaker 16: his party. So there's a question on how much he

911
00:44:58,280 --> 00:45:01,160
Speaker 16: has then the negotiating power within his own caucus to

912
00:45:01,239 --> 00:45:04,360
Speaker 16: get something passed again. I mean, in that interview with

913
00:45:04,440 --> 00:45:06,799
Speaker 16: Mitch McConnell that shoe was referencing earlier, he said, we're

914
00:45:06,840 --> 00:45:09,040
Speaker 16: in a situation now in the House of Representatives that

915
00:45:09,160 --> 00:45:11,400
Speaker 16: is much more reluctant to enter a deal than we

916
00:45:11,560 --> 00:45:14,600
Speaker 16: had in twenty eleven. I mean, how hard is the

917
00:45:14,680 --> 00:45:18,080
Speaker 16: composition of the House here, Mick for McCarthy to navigate,

918
00:45:18,120 --> 00:45:20,719
Speaker 16: even if he can ultimately get President Biden to budgetinch.

919
00:45:21,480 --> 00:45:24,040
Speaker 10: Now, that's right, Kealley, that's the ultimate question here, right.

920
00:45:24,040 --> 00:45:25,439
Speaker 10: The rest of it is sort of song and dance

921
00:45:25,520 --> 00:45:28,080
Speaker 10: and politics in spin. That's the point, all right. This

922
00:45:28,200 --> 00:45:30,680
Speaker 10: takes sixty votes in the Senate. That means it has

923
00:45:30,760 --> 00:45:34,200
Speaker 10: to be a bipartisan bill. Can a bipartisan bill that

924
00:45:34,360 --> 00:45:37,640
Speaker 10: passes in the Senate pass in the House with just

925
00:45:37,719 --> 00:45:41,160
Speaker 10: Republican votes. There's no chance of that happening. Okay, that's

926
00:45:41,239 --> 00:45:43,680
Speaker 10: not going to happen. So the House, once it passes

927
00:45:43,719 --> 00:45:45,640
Speaker 10: the Senate, it's sixty votes. Whether or not the House

928
00:45:45,719 --> 00:45:48,160
Speaker 10: goes first the Senate goes first, doesn't really make any difference.

929
00:45:48,160 --> 00:45:50,000
Speaker 10: It's going to be a deal that's cooked up. Is

930
00:45:50,160 --> 00:45:52,960
Speaker 10: how big of a majority can can Kevin hold in

931
00:45:53,280 --> 00:45:55,440
Speaker 10: his chamber? He's got to be able to hold a

932
00:45:55,480 --> 00:45:57,800
Speaker 10: majority of the majority. He'd love to have one hundred

933
00:45:57,800 --> 00:45:59,960
Speaker 10: and eighty two hundred votes, but you're never going to

934
00:46:00,120 --> 00:46:03,360
Speaker 10: to get every single Republican to vote for anything that

935
00:46:03,520 --> 00:46:05,600
Speaker 10: picks up by Parsons support in the Senate just by

936
00:46:05,640 --> 00:46:06,279
Speaker 10: its very nature.

937
00:46:06,440 --> 00:46:08,120
Speaker 2: Well, of course we're talking to a co founder of

938
00:46:08,160 --> 00:46:10,239
Speaker 2: the House Freedom Caucus here. What does he do with

939
00:46:10,280 --> 00:46:12,399
Speaker 2: the ralph Normans of the world. Then if he can't

940
00:46:12,440 --> 00:46:15,239
Speaker 2: get them on board, he just needs that many more Democrats.

941
00:46:16,160 --> 00:46:19,320
Speaker 10: Yeah, again, I imagine this bill because of the sixty

942
00:46:19,440 --> 00:46:22,520
Speaker 10: vote rule, this has to be by partisan in order

943
00:46:22,600 --> 00:46:24,040
Speaker 10: to pass the Senate. Whether or not to pass the

944
00:46:24,080 --> 00:46:26,640
Speaker 10: Senate first or last doesn't make any difference. Everybody knows

945
00:46:26,680 --> 00:46:29,080
Speaker 10: that that's going to have to be the structure for

946
00:46:29,200 --> 00:46:31,560
Speaker 10: it to pass in the Senate. So the question is

947
00:46:31,680 --> 00:46:34,880
Speaker 10: how big of a Republican majority can you build in

948
00:46:35,040 --> 00:46:37,800
Speaker 10: the House for a package that can still get sixty

949
00:46:37,880 --> 00:46:40,239
Speaker 10: votes in the Senate. That's going to be the sweet spot.

950
00:46:40,320 --> 00:46:42,280
Speaker 10: There's no way Kevin will get two hundred and eighteen

951
00:46:42,360 --> 00:46:45,839
Speaker 10: votes from Republicans. He couldn't even get everybody to vote

952
00:46:46,080 --> 00:46:48,239
Speaker 10: on this last deal, right, He's going to lose some

953
00:46:48,360 --> 00:46:51,280
Speaker 10: Republicans that're going to probably be from the right wing fringe.

954
00:46:51,520 --> 00:46:53,400
Speaker 10: The question is going to be how does he manage it,

955
00:46:53,760 --> 00:46:56,600
Speaker 10: how does the right wing perceive that he has treated them?

956
00:46:57,080 --> 00:47:00,560
Speaker 10: And also you know just how many how a large

957
00:47:00,640 --> 00:47:02,879
Speaker 10: majority he gets at his own conference. He cannot pass

958
00:47:02,920 --> 00:47:05,840
Speaker 10: the bill with twenty Republicans and every Democrat. That is

959
00:47:05,840 --> 00:47:07,560
Speaker 10: a formula for him losing his job.

960
00:47:07,960 --> 00:47:10,200
Speaker 16: Hey, mix, just quickly, we only have thirty seconds left.

961
00:47:10,239 --> 00:47:12,000
Speaker 16: But how bad do things need to get in the

962
00:47:12,080 --> 00:47:14,000
Speaker 16: market for the pressure to turn up a notch? Is

963
00:47:14,040 --> 00:47:15,640
Speaker 16: it a thousand points on the Dow? Is there a

964
00:47:15,680 --> 00:47:16,440
Speaker 16: real metric here?

965
00:47:17,880 --> 00:47:18,080
Speaker 7: Yeah?

966
00:47:18,239 --> 00:47:21,240
Speaker 10: Probably. I mean you go back to the global financial

967
00:47:21,320 --> 00:47:25,000
Speaker 10: crisis back in two thousand. Was it eight or eight? Eight? No, yeah,

968
00:47:25,000 --> 00:47:26,600
Speaker 10: it was eight it was I think was seven hundred

969
00:47:26,600 --> 00:47:28,640
Speaker 10: and fifty points? A thousand points something to get somebody's attention,

970
00:47:28,840 --> 00:47:31,439
Speaker 10: that's back when Tart failed. I think, yeah, it would

971
00:47:31,480 --> 00:47:33,320
Speaker 10: have to be a big move, and it would have

972
00:47:33,480 --> 00:47:35,879
Speaker 10: to be during the session, I think, for to sort

973
00:47:35,920 --> 00:47:36,520
Speaker 10: of move the needle.

974
00:47:37,480 --> 00:47:39,640
Speaker 2: Great to have you back, Mick. Imagine the world will

975
00:47:39,680 --> 00:47:42,279
Speaker 2: be in a week from today. Former OMB director, former

976
00:47:42,400 --> 00:47:45,760
Speaker 2: member of Congress, former acting White House Chief of Staff.

977
00:47:46,960 --> 00:47:49,239
Speaker 2: Fascinating situation that we're in here. So that's the new

978
00:47:49,280 --> 00:47:51,600
Speaker 2: metric is one thousand dollars, a thousand points on the Dow,

979
00:47:51,680 --> 00:47:53,080
Speaker 2: the new one hundred points.

980
00:47:53,160 --> 00:47:54,880
Speaker 16: I don't know, I was just throwing it out there,

981
00:47:54,920 --> 00:47:56,840
Speaker 16: but I would have to imagine that the masses of

982
00:47:56,880 --> 00:47:59,879
Speaker 16: America aren't necessarily paying attention to the Treasury bill.

983
00:48:00,400 --> 00:48:00,920
Speaker 11: For example.

984
00:48:01,000 --> 00:48:02,680
Speaker 16: The stock market seems to get people's attention.

985
00:48:02,760 --> 00:48:03,239
Speaker 2: It sure does.

986
00:48:03,280 --> 00:48:07,760
Speaker 1: And if there's one index, this is Bloomberg. You're listening

987
00:48:07,840 --> 00:48:11,560
Speaker 1: to the Bloomberg Sound on podcast. Catch us live weekdays

988
00:48:11,600 --> 00:48:14,919
Speaker 1: at one Eastern on Bloomberg dot com, the iHeartRadio app,

989
00:48:14,960 --> 00:48:17,880
Speaker 1: and the Bloomberg Business app, or listen on demand wherever

990
00:48:17,960 --> 00:48:19,120
Speaker 1: you get your podcasts.

991
00:48:20,400 --> 00:48:23,000
Speaker 2: I set up with Mick mulvaney Kayley on exactly what

992
00:48:23,200 --> 00:48:27,239
Speaker 2: might happen tomorrow, maybe where our expectations should be as

993
00:48:27,280 --> 00:48:30,480
Speaker 2: the President sits down with the leaders on the Hill.

994
00:48:31,120 --> 00:48:34,000
Speaker 2: And by that I keep saying Kevin McCarthy, yep, because

995
00:48:34,040 --> 00:48:37,600
Speaker 2: we know that Mitch McConnell, Chuck Schumer, hackeym Jeffries probably

996
00:48:37,640 --> 00:48:39,800
Speaker 2: will not have quite as much to say as the

997
00:48:39,880 --> 00:48:42,600
Speaker 2: other two we mentioned. But you know, look I hope

998
00:48:42,640 --> 00:48:44,759
Speaker 2: the stock market is not expecting a deal to be

999
00:48:44,840 --> 00:48:47,480
Speaker 2: announced when Kevin McCarthy comes out in the driveway. If

1000
00:48:47,520 --> 00:48:50,440
Speaker 2: he comes out, this is the beginning, right. I know

1001
00:48:50,480 --> 00:48:53,200
Speaker 2: they met however many ninety something days ago, but this

1002
00:48:53,360 --> 00:48:57,680
Speaker 2: is really the real meeting that could begin the process

1003
00:48:58,480 --> 00:49:01,480
Speaker 2: for compromise, and I'm just waiting for the market to

1004
00:49:01,560 --> 00:49:02,520
Speaker 2: start caring.

1005
00:49:03,040 --> 00:49:05,759
Speaker 16: Well, the stock market maybe right, because we see it

1006
00:49:05,840 --> 00:49:07,800
Speaker 16: showing up in the bond market and certain points of

1007
00:49:08,040 --> 00:49:11,040
Speaker 16: the treasury curve with maturities that would mature in June,

1008
00:49:11,160 --> 00:49:13,680
Speaker 16: kind of the month of in question here as to

1009
00:49:13,719 --> 00:49:15,160
Speaker 16: whether or not the US is going to be able

1010
00:49:15,200 --> 00:49:18,799
Speaker 16: to fully meet its obligations and make those payments. You're

1011
00:49:18,840 --> 00:49:21,480
Speaker 16: seeing it show up there, but not necessarily the kind

1012
00:49:21,560 --> 00:49:25,759
Speaker 16: of headline grabbing market moves. Within the equity market, specifically

1013
00:49:25,880 --> 00:49:27,920
Speaker 16: where people are looking at their four to one ks

1014
00:49:28,000 --> 00:49:30,400
Speaker 16: and all their mutual funds. It's starting to really feel

1015
00:49:30,440 --> 00:49:32,759
Speaker 16: the sense of oh, this is a big deal. It

1016
00:49:32,840 --> 00:49:34,680
Speaker 16: doesn't feel like we're at that point yet. So I

1017
00:49:34,719 --> 00:49:38,200
Speaker 16: think you raise an interesting question proposition here, Joe, the

1018
00:49:38,280 --> 00:49:40,719
Speaker 16: idea that what if the market doesn't like what it

1019
00:49:40,800 --> 00:49:44,279
Speaker 16: hears tomorrow after this meeting, which could be just no

1020
00:49:44,480 --> 00:49:49,680
Speaker 16: progress was made, or half the two sides get farther apart, because.

1021
00:49:49,440 --> 00:49:52,200
Speaker 2: No, no, most Americans do not read beyond the headline, right,

1022
00:49:52,360 --> 00:49:53,759
Speaker 2: And there are a lot of folks out there thinking

1023
00:49:53,800 --> 00:49:55,080
Speaker 2: tomorrow is going to be a big day.

1024
00:49:55,320 --> 00:49:58,160
Speaker 16: Right, the meeting in the Oval Office is actually happening.

1025
00:49:58,360 --> 00:50:01,000
Speaker 16: I mean, we all just watch the kentucktive this weekend, right,

1026
00:50:01,040 --> 00:50:03,439
Speaker 16: I feel like it's like the gates are opening. Still

1027
00:50:03,480 --> 00:50:04,560
Speaker 16: got the whole horse race to.

1028
00:50:04,600 --> 00:50:08,319
Speaker 2: Go, how true? And that goes by pretty fast as

1029
00:50:09,760 --> 00:50:13,719
Speaker 2: delete Singh's fascinating conversation on Bloomberg's surveillance this morning. Of course,

1030
00:50:13,800 --> 00:50:17,680
Speaker 2: former White House Economic advisor in this in this administration,

1031
00:50:18,200 --> 00:50:22,640
Speaker 2: he's now at PGI AM fixed income talking about what's

1032
00:50:22,719 --> 00:50:26,200
Speaker 2: the motivator here, what's the incentive because we don't have.

1033
00:50:26,400 --> 00:50:28,160
Speaker 4: The incentives are just not yet in place.

1034
00:50:28,400 --> 00:50:31,440
Speaker 5: McCarthy could lose his speakership if he folds early to

1035
00:50:31,480 --> 00:50:34,080
Speaker 5: the President with a clean increase in at that limit,

1036
00:50:34,600 --> 00:50:36,960
Speaker 5: the President can give a nod to anything near the

1037
00:50:37,040 --> 00:50:41,040
Speaker 5: scale of spending cuts proposed by McCarthy because they would undercut.

1038
00:50:40,800 --> 00:50:43,399
Speaker 4: Much of his domestic agenda and lose his political base.

1039
00:50:44,040 --> 00:50:46,680
Speaker 5: So I'm afraid markets stress is still what's needed to

1040
00:50:46,760 --> 00:50:48,799
Speaker 5: create cover or face saving compromise.

1041
00:50:49,120 --> 00:50:50,840
Speaker 2: What did you ask, Mick, is a thousand points going

1042
00:50:50,880 --> 00:50:52,920
Speaker 2: to do it? That's the kind of day we're talking about, though,

1043
00:50:52,920 --> 00:50:54,000
Speaker 2: that's what he's talking about.

1044
00:50:54,239 --> 00:50:57,680
Speaker 16: Yeah again, headline grabbing, right, That maybe is the kind

1045
00:50:57,680 --> 00:50:58,320
Speaker 16: of thing we're.

1046
00:50:58,160 --> 00:50:59,880
Speaker 2: All just to think. It's come to this. I think

1047
00:51:00,280 --> 00:51:04,239
Speaker 2: this is absurd. I'm sure Mark Goldline agrees. He's with

1048
00:51:04,360 --> 00:51:06,560
Speaker 2: us now the senior VP, senior policy director of the

1049
00:51:06,560 --> 00:51:10,400
Speaker 2: Committee for a Responsible Federal Budget. Where you know, in

1050
00:51:10,480 --> 00:51:12,359
Speaker 2: a month, Mark, do you guys just close the whole

1051
00:51:12,400 --> 00:51:15,359
Speaker 2: shop if this doesn't get figured out, just go onto

1052
00:51:15,400 --> 00:51:16,319
Speaker 2: a new line of work here.

1053
00:51:17,640 --> 00:51:19,920
Speaker 17: If this doesn't get figure out, a lot of shops

1054
00:51:19,920 --> 00:51:21,000
Speaker 17: are going to be closed down on it.

1055
00:51:21,719 --> 00:51:24,600
Speaker 2: Good one, very nice. What is your expectation than Mark

1056
00:51:25,280 --> 00:51:27,960
Speaker 2: for this meeting tomorrow? Do you want to hear something optimistic,

1057
00:51:28,040 --> 00:51:29,880
Speaker 2: something positive from both both parties?

1058
00:51:30,920 --> 00:51:32,879
Speaker 17: Well, of course that's what I want to hear. Look,

1059
00:51:32,960 --> 00:51:35,560
Speaker 17: they're not going to cut the deal, but in a

1060
00:51:35,600 --> 00:51:38,600
Speaker 17: perfect world, they would at least agree to two things.

1061
00:51:38,920 --> 00:51:41,440
Speaker 17: The first is, we all agree we're not going to default.

1062
00:51:41,640 --> 00:51:43,480
Speaker 17: We all agree we're going to come to a resolution

1063
00:51:43,520 --> 00:51:46,040
Speaker 17: before the time is up. And the second is we're

1064
00:51:46,040 --> 00:51:49,000
Speaker 17: going to agree to keep talking on budget issues because

1065
00:51:49,040 --> 00:51:51,239
Speaker 17: the debt is out of control. That's what I'd like

1066
00:51:51,360 --> 00:51:53,279
Speaker 17: to hear. Whether we actually do hear that is a

1067
00:51:53,320 --> 00:51:53,919
Speaker 17: different question.

1068
00:51:54,640 --> 00:51:57,520
Speaker 16: Well, And of course that differs slightly from the approach

1069
00:51:57,600 --> 00:52:00,360
Speaker 16: that House Speaker Kevin McCarthy has taken, which that he

1070
00:52:00,520 --> 00:52:03,440
Speaker 16: wants all of that spending talk to be tied in

1071
00:52:03,520 --> 00:52:07,040
Speaker 16: specifically with the debt ceiling, not with the budget. Is

1072
00:52:07,080 --> 00:52:08,160
Speaker 16: that the wrong approach here?

1073
00:52:08,200 --> 00:52:08,560
Speaker 11: Do you think?

1074
00:52:08,640 --> 00:52:12,560
Speaker 17: Mark? Well, I think it's a little bit semantics. Look,

1075
00:52:12,600 --> 00:52:17,120
Speaker 17: we've put budget deals and debt ceiling deals together many

1076
00:52:17,239 --> 00:52:19,680
Speaker 17: many times in the past, and the Trump era, in

1077
00:52:19,800 --> 00:52:22,560
Speaker 17: the Obama era, going back to Reagan, and that's fine.

1078
00:52:22,840 --> 00:52:25,120
Speaker 17: I think doing it on separate tracks is fine. There's

1079
00:52:25,160 --> 00:52:26,799
Speaker 17: no one right way to do it. But the one

1080
00:52:26,880 --> 00:52:28,640
Speaker 17: wrong thing would be to let us actually go over

1081
00:52:28,680 --> 00:52:30,640
Speaker 17: the cliff and to default on our debt.

1082
00:52:31,840 --> 00:52:34,359
Speaker 2: So where's the committee right now on an outcome here?

1083
00:52:34,400 --> 00:52:37,239
Speaker 2: I know you're not on the forecasting business, Mark, but

1084
00:52:37,800 --> 00:52:40,560
Speaker 2: should the markets be more concerned than they are now?

1085
00:52:40,600 --> 00:52:43,120
Speaker 2: I know we're seeing gyrations in the yield curve here,

1086
00:52:43,160 --> 00:52:46,279
Speaker 2: but the stock markets whistlam passed the graveyard a lot

1087
00:52:46,320 --> 00:52:50,520
Speaker 2: more concerned with earnings reporting season and inflation, even as

1088
00:52:50,600 --> 00:52:54,560
Speaker 2: we get some very real warnings from researchers and policymakers

1089
00:52:54,640 --> 00:52:54,800
Speaker 2: on this.

1090
00:52:55,920 --> 00:52:58,760
Speaker 17: So I think if we're thinking about what's the median

1091
00:52:58,840 --> 00:53:02,320
Speaker 17: scenario or even what's middle seventy percent, Yeah, the markets

1092
00:53:02,320 --> 00:53:03,840
Speaker 17: are in the right place. We're going to resolve this,

1093
00:53:04,400 --> 00:53:06,520
Speaker 17: but we need to think about tail end risk here,

1094
00:53:06,640 --> 00:53:09,960
Speaker 17: and the tail end risk is too high for comfort,

1095
00:53:10,200 --> 00:53:12,600
Speaker 17: and probably high enough that the markets ought to at

1096
00:53:12,680 --> 00:53:13,840
Speaker 17: least be a little bit concerned.

1097
00:53:15,480 --> 00:53:19,080
Speaker 16: Well to this kind of point, it's the idea that

1098
00:53:19,160 --> 00:53:21,680
Speaker 16: the market's been through this dance before. It has observed

1099
00:53:22,360 --> 00:53:26,279
Speaker 16: the very slow pace of deal making in Washington and

1100
00:53:26,520 --> 00:53:29,960
Speaker 16: how difficult it has been throughout history to actually get

1101
00:53:30,000 --> 00:53:32,359
Speaker 16: this done. You know, this isn't our first, our first

1102
00:53:32,440 --> 00:53:34,440
Speaker 16: go around, but it does raise a question of why

1103
00:53:34,520 --> 00:53:36,839
Speaker 16: we need to keep going through this song and dance.

1104
00:53:36,880 --> 00:53:38,719
Speaker 16: And I know that the Committee for a Responsible Federal

1105
00:53:38,760 --> 00:53:42,480
Speaker 16: Budget has suggested reforms to the debt ceiling. Once we

1106
00:53:42,560 --> 00:53:45,279
Speaker 16: even get through this episode, how do we avoid doing

1107
00:53:45,400 --> 00:53:48,920
Speaker 16: this again? What could be done to help you not

1108
00:53:49,520 --> 00:53:50,840
Speaker 16: have this problem in the future.

1109
00:53:51,760 --> 00:53:54,040
Speaker 17: Well, I think that debt ceiling is a very poorly

1110
00:53:54,120 --> 00:53:58,800
Speaker 17: designed mechanism for a very important goal, which is we

1111
00:53:58,880 --> 00:54:01,360
Speaker 17: need a way to make sure that we are generally

1112
00:54:01,480 --> 00:54:05,040
Speaker 17: reevaluating and evaluating our fiscal situation ease. If you look

1113
00:54:05,040 --> 00:54:07,160
Speaker 17: at our debt, it's about to hit a record level,

1114
00:54:07,239 --> 00:54:09,239
Speaker 17: exceeding World War two levels. If you look at the

1115
00:54:09,280 --> 00:54:12,080
Speaker 17: inflation rate, which isn't entirely because the fiscal policy, but

1116
00:54:12,200 --> 00:54:14,719
Speaker 17: fiscal policy is certainly a fact of you, it's out

1117
00:54:14,760 --> 00:54:16,760
Speaker 17: of control. If you look at interest rates, they're rising.

1118
00:54:17,080 --> 00:54:18,839
Speaker 17: So we do need to actually take a look at

1119
00:54:18,840 --> 00:54:21,600
Speaker 17: the budget, and the debt ceiling offers an opportunity to

1120
00:54:21,719 --> 00:54:24,000
Speaker 17: do that. It's just too high stakes. We need a

1121
00:54:24,000 --> 00:54:27,360
Speaker 17: way to reform it so that the consequence of inaction

1122
00:54:27,560 --> 00:54:32,000
Speaker 17: its politicians get punished, but the economy doesn't, you know,

1123
00:54:32,080 --> 00:54:33,720
Speaker 17: get thrown down the toilet in the process.

1124
00:54:34,880 --> 00:54:36,640
Speaker 2: How come anevery want to talk about a short term

1125
00:54:36,840 --> 00:54:37,920
Speaker 2: anything right now?

1126
00:54:38,000 --> 00:54:38,200
Speaker 10: Mark?

1127
00:54:38,239 --> 00:54:39,719
Speaker 2: It seems like we could buy a minute, and I

1128
00:54:40,080 --> 00:54:42,560
Speaker 2: is it really because we can't get anything done unless

1129
00:54:42,560 --> 00:54:46,239
Speaker 2: it's the night before you know, a fiscal calamity, or

1130
00:54:46,640 --> 00:54:49,000
Speaker 2: is the idea that we want to seize the opportunity,

1131
00:54:49,040 --> 00:54:52,240
Speaker 2: everyone's at the table. Why would you extend it? Wouldn't

1132
00:54:52,239 --> 00:54:54,239
Speaker 2: it give you some peace of mind to see the

1133
00:54:54,360 --> 00:54:58,160
Speaker 2: debt ceiling suspended, for instance, still September and all the

1134
00:54:58,200 --> 00:54:59,520
Speaker 2: stuff be negotiated together.

1135
00:55:00,400 --> 00:55:03,399
Speaker 17: You know, normal convention used to be people would hold

1136
00:55:03,400 --> 00:55:06,080
Speaker 17: the dead limit quote unquote hostage all the time. But

1137
00:55:06,200 --> 00:55:08,840
Speaker 17: you're only holding hostage the long term increases. So we

1138
00:55:08,960 --> 00:55:10,480
Speaker 17: used to say all the time, we'll give you a

1139
00:55:10,520 --> 00:55:12,759
Speaker 17: short term increase. We're just not giving you a long

1140
00:55:12,880 --> 00:55:15,440
Speaker 17: term increase until you agree text or agree to why.

1141
00:55:15,880 --> 00:55:18,399
Speaker 17: And that may be what happens. Again, it's not clear

1142
00:55:18,440 --> 00:55:20,480
Speaker 17: if people are really against the short term increase or

1143
00:55:20,480 --> 00:55:24,359
Speaker 17: if that's just rhetoric. But I would hope certainly short

1144
00:55:24,440 --> 00:55:26,040
Speaker 17: term is better than going off the cliff.

1145
00:55:27,480 --> 00:55:30,440
Speaker 16: Yeah, And there's also a question of whether everyone could

1146
00:55:30,480 --> 00:55:33,680
Speaker 16: get behind a short term increase, because members of Congress

1147
00:55:33,760 --> 00:55:35,360
Speaker 16: and members of the Senate that I've spoken with in

1148
00:55:35,400 --> 00:55:36,960
Speaker 16: the last week have said no, they think that's a

1149
00:55:37,000 --> 00:55:39,920
Speaker 16: bad idea, Senator jd Vance being one, Byron Donald's, the

1150
00:55:39,960 --> 00:55:43,880
Speaker 16: Congressman from Florida being another. Of course, what Republicans have

1151
00:55:44,040 --> 00:55:46,520
Speaker 16: said that they wanted is deficit reduction at the end

1152
00:55:46,560 --> 00:55:48,880
Speaker 16: of the day, Mark. So when we were thinking about

1153
00:55:49,000 --> 00:55:52,720
Speaker 16: the shape that these negotiations, how it could take shape,

1154
00:55:53,480 --> 00:55:56,520
Speaker 16: and whether spending cuts or revenue raising measure should be

1155
00:55:56,600 --> 00:55:59,520
Speaker 16: part of the puzzle, what is your suggestion?

1156
00:56:01,120 --> 00:56:03,560
Speaker 17: Well, I think the House is actually on the right track.

1157
00:56:04,360 --> 00:56:08,120
Speaker 17: I think we need to have discretionary spending caps. The

1158
00:56:08,200 --> 00:56:11,680
Speaker 17: appropriators have really been out of control since twenty eighteen.

1159
00:56:11,920 --> 00:56:15,520
Speaker 17: In fact, it started in the Trump presidency, but especially

1160
00:56:15,600 --> 00:56:18,120
Speaker 17: since the caps expired, and it is time to rein

1161
00:56:18,200 --> 00:56:20,839
Speaker 17: that in So, I think they're on the right track there,

1162
00:56:21,080 --> 00:56:22,920
Speaker 17: but they have to be caps that both sides can

1163
00:56:23,000 --> 00:56:24,480
Speaker 17: agree to. I think if you look at the House

1164
00:56:24,520 --> 00:56:28,000
Speaker 17: Bill as an opening offer, that's something we can negotiate from.

1165
00:56:28,200 --> 00:56:29,439
Speaker 17: It's not where we're going to land.

1166
00:56:31,160 --> 00:56:33,040
Speaker 2: Well, I guess we're going to find out at least

1167
00:56:33,040 --> 00:56:36,560
Speaker 2: tomorrow if this timeline might work. Mark. I don't know

1168
00:56:36,560 --> 00:56:38,640
Speaker 2: if you feel that way, but just to see the

1169
00:56:38,760 --> 00:56:42,400
Speaker 2: beginnings of compromise might go a long way to soothing

1170
00:56:42,560 --> 00:56:46,080
Speaker 2: some minds here and you know, digging into something substantial.

1171
00:56:46,200 --> 00:56:48,960
Speaker 2: We spoke earlier, as I mentioned, with Mick mulvaney. He said,

1172
00:56:49,000 --> 00:56:52,239
Speaker 2: if you do not see Kevin McCarthy outside on the

1173
00:56:52,320 --> 00:56:54,960
Speaker 2: driveway after this meeting. It could be either really good

1174
00:56:55,080 --> 00:56:57,000
Speaker 2: or really bad. But if they're really onto something, he

1175
00:56:57,040 --> 00:57:00,200
Speaker 2: may not want to be talking to reporters. Is that

1176
00:57:00,280 --> 00:57:02,160
Speaker 2: how you see it. If we don't hear anything tomorrow,

1177
00:57:02,200 --> 00:57:03,520
Speaker 2: it might be actually a very good thing.

1178
00:57:05,520 --> 00:57:05,719
Speaker 14: Yeah.

1179
00:57:06,000 --> 00:57:08,919
Speaker 17: I think a lot of times no news is good news.

1180
00:57:09,280 --> 00:57:11,360
Speaker 17: But look, I don't expect they're going to have resolution

1181
00:57:11,520 --> 00:57:13,520
Speaker 17: coming out of this meeting. We should have done this

1182
00:57:13,680 --> 00:57:18,120
Speaker 17: meeting four months ago. But this is the start of

1183
00:57:18,160 --> 00:57:21,880
Speaker 17: a process. They are going to probably take every minute

1184
00:57:22,200 --> 00:57:24,120
Speaker 17: every day that they have before the X day to

1185
00:57:24,520 --> 00:57:26,800
Speaker 17: get to the end of this process. And let's just

1186
00:57:26,880 --> 00:57:30,600
Speaker 17: all hope together that they don't accidentally go too long.

1187
00:57:32,080 --> 00:57:34,960
Speaker 16: Yeah, well, there's a question of what that timeline really is, Joe,

1188
00:57:35,000 --> 00:57:37,440
Speaker 16: because of course Treasury Secretary Janey eel And said as

1189
00:57:37,480 --> 00:57:42,520
Speaker 16: early as June first, leave some room some margin for

1190
00:57:42,720 --> 00:57:45,400
Speaker 16: error there. There's also the question of when it gets

1191
00:57:45,680 --> 00:57:48,120
Speaker 16: to be too much for the credit rating agencies as well.

1192
00:57:48,640 --> 00:57:50,400
Speaker 2: Yeah, we were two weeks away last time, and we're

1193
00:57:50,440 --> 00:57:52,200
Speaker 2: kind of wondering how close we're going to get this time.

1194
00:57:52,840 --> 00:57:54,200
Speaker 2: We're out of time mark, But do you have a

1195
00:57:54,280 --> 00:57:56,520
Speaker 2: take on that, should we be worried more about a

1196
00:57:56,600 --> 00:57:59,000
Speaker 2: downgrade right now, if we go.

1197
00:57:59,080 --> 00:58:01,280
Speaker 17: Over the deatlimit, very likely to get downgraded.

1198
00:58:01,360 --> 00:58:02,640
Speaker 2: Yes, how about an advance of that?

1199
00:58:02,760 --> 00:58:04,600
Speaker 17: Though first, sorry, say that again.

1200
00:58:04,840 --> 00:58:06,520
Speaker 2: How about an advance of it? It came two weeks

1201
00:58:06,560 --> 00:58:09,440
Speaker 2: earlier than actual defaulting in twenty eleven.

1202
00:58:10,920 --> 00:58:13,520
Speaker 17: It depends how close a game of chicken if we're in,

1203
00:58:13,680 --> 00:58:15,960
Speaker 17: If we're in June and they're able to stretch the

1204
00:58:16,080 --> 00:58:17,919
Speaker 17: X date out, which I think is very possible because

1205
00:58:18,600 --> 00:58:21,480
Speaker 17: get tax payments. We may have come close enough to

1206
00:58:22,560 --> 00:58:24,280
Speaker 17: flow and closer for the suns and that is enough

1207
00:58:24,320 --> 00:58:26,360
Speaker 17: for down grade. But my guess is if we don't

1208
00:58:26,400 --> 00:58:31,520
Speaker 17: actually misdapayment or almost misapayment, we won't get it down grade.

1209
00:58:31,840 --> 00:58:33,840
Speaker 2: Mark Goldline, great to have you back. Mark, don't be

1210
00:58:33,880 --> 00:58:36,600
Speaker 2: a stranger with the Committee for a Responsible Federal Budget.

1211
00:58:36,720 --> 00:58:39,720
Speaker 2: Just a question of how close to the sun we fly, Achars.

1212
00:58:41,360 --> 00:58:44,720
Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch the

1213
00:58:44,760 --> 00:58:48,600
Speaker 1: program live weekdays at one Eastern on Bloomberg Radio, the

1214
00:58:48,720 --> 00:58:52,000
Speaker 1: tune in app, Bloomberg dot com, and the Bloomberg Business app.

1215
00:58:52,200 --> 00:58:55,000
Speaker 1: You can also listen live on Amazon Alexa from our

1216
00:58:55,080 --> 00:58:59,120
Speaker 1: flagship New York station just say Alexa play Bloomberg eleven

1217
00:58:59,240 --> 00:59:00,840
Speaker 1: thirty with.

1218
00:59:00,960 --> 00:59:03,480
Speaker 2: News coming out of the Fed today. Of course it

1219
00:59:03,800 --> 00:59:07,920
Speaker 2: was not about interest rates today, Kaylee, but the banks

1220
00:59:07,960 --> 00:59:10,080
Speaker 2: and whether there's still lending as much here. It's something

1221
00:59:10,120 --> 00:59:12,760
Speaker 2: we're going to talk about with Michael McKee. But following

1222
00:59:12,840 --> 00:59:15,200
Speaker 2: the interest rate hikes and then of course the bank

1223
00:59:15,280 --> 00:59:17,040
Speaker 2: failures that we've seen, there were a lot of questions

1224
00:59:17,040 --> 00:59:18,200
Speaker 2: about what this was going to look like.

1225
00:59:18,640 --> 00:59:20,720
Speaker 16: Yeah, there were how much our credit conditions in the

1226
00:59:20,800 --> 00:59:24,320
Speaker 16: economy really tightening. Because we've heard repeatedly from the Federal

1227
00:59:24,360 --> 00:59:26,320
Speaker 16: Reserve as far back as the March meeting when they

1228
00:59:26,360 --> 00:59:29,360
Speaker 16: did hike in the aftermath of those failures of Silicon

1229
00:59:29,440 --> 00:59:31,360
Speaker 16: Valley Bank and Signature Bank, that they did expect it

1230
00:59:31,360 --> 00:59:33,200
Speaker 16: would lead to some tightening of standards. It was just

1231
00:59:33,240 --> 00:59:35,800
Speaker 16: a question of how much. It was unknown what was

1232
00:59:35,840 --> 00:59:37,600
Speaker 16: going to happen. So we were looking at the data

1233
00:59:37,640 --> 00:59:39,880
Speaker 16: to really give us a sense. And mind you, this

1234
00:59:40,000 --> 00:59:42,120
Speaker 16: is data that the FED did have in hand when

1235
00:59:42,160 --> 00:59:45,320
Speaker 16: it made its decision last week. Chairman Powell at the

1236
00:59:45,320 --> 00:59:47,240
Speaker 16: press conference alluded to the fact that it was going

1237
00:59:47,320 --> 00:59:50,440
Speaker 16: to show a tightening in standards, and indeed that is

1238
00:59:50,560 --> 00:59:53,080
Speaker 16: what the data showed the proportion of US banks tightening

1239
00:59:53,200 --> 00:59:56,080
Speaker 16: terms on loans for medium and large businesses rose to

1240
00:59:56,200 --> 00:59:58,760
Speaker 16: forty six percent. That was up from forty four point

1241
00:59:58,800 --> 01:00:01,240
Speaker 16: eight percent in the four quarter of last year. Let's

1242
01:00:01,240 --> 01:00:03,240
Speaker 16: get some more perspective on this and bring in Michael

1243
01:00:03,280 --> 01:00:07,760
Speaker 16: mcke Blomberg's international economics and policy correspondent. So, Mike, I

1244
01:00:07,800 --> 01:00:10,440
Speaker 16: guess you would call it a moderate tightening in conditions.

1245
01:00:10,440 --> 01:00:11,080
Speaker 16: How do you read this?

1246
01:00:11,880 --> 01:00:16,320
Speaker 18: It's actually kind of a very small tightening in conditions.

1247
01:00:16,920 --> 01:00:22,800
Speaker 18: When you add the tightening for small businesses to large businesses,

1248
01:00:22,840 --> 01:00:25,280
Speaker 18: you get a bit of an increase. But when you

1249
01:00:25,360 --> 01:00:28,320
Speaker 18: look at the large and medium sized businesses tightening, it

1250
01:00:28,440 --> 01:00:31,360
Speaker 18: went from one and a half percent to three point

1251
01:00:31,440 --> 01:00:36,280
Speaker 18: two percent. For TITAN considerably because two banks tightened their

1252
01:00:36,520 --> 01:00:43,120
Speaker 18: credit standards and TITANS somewhat went down from forty three

1253
01:00:43,160 --> 01:00:47,360
Speaker 18: point three to forty two point nine percent. So it

1254
01:00:47,480 --> 01:00:50,919
Speaker 18: looks like fewer banks were tightening their credit standards unchanged

1255
01:00:51,080 --> 01:00:54,280
Speaker 18: basically fifty four percent, so majority of banks had not

1256
01:00:54,520 --> 01:01:00,160
Speaker 18: changed their lending standards. We expect to see percentage it's

1257
01:01:00,240 --> 01:01:03,520
Speaker 18: like forty two point nine percent for tighten somewhat in

1258
01:01:03,640 --> 01:01:06,400
Speaker 18: a situation like we're in right now when the economy

1259
01:01:06,480 --> 01:01:08,880
Speaker 18: is supposed to be slowing. The FED has raised interest

1260
01:01:08,920 --> 01:01:11,560
Speaker 18: rates so much, but we thought, or at least a

1261
01:01:11,600 --> 01:01:14,080
Speaker 18: lot of people thought we would see a considerable tightening

1262
01:01:14,560 --> 01:01:18,200
Speaker 18: effort after the bank ructions of mid March, and that

1263
01:01:18,800 --> 01:01:20,040
Speaker 18: does not appear to have happened.

1264
01:01:20,200 --> 01:01:22,080
Speaker 16: Well, I guess it's a question than Mike, of what

1265
01:01:22,280 --> 01:01:25,360
Speaker 16: tightening is yet to come, because you know, there is

1266
01:01:25,400 --> 01:01:28,400
Speaker 16: a paragraph in the report here that basically talks about

1267
01:01:28,400 --> 01:01:31,160
Speaker 16: bank's outlook for lending standards over the remainder of twenty

1268
01:01:31,240 --> 01:01:33,959
Speaker 16: twenty three, and they say banks reported expecting to tighten

1269
01:01:34,040 --> 01:01:38,120
Speaker 16: standards across all loan category. So is it the idea

1270
01:01:38,160 --> 01:01:39,960
Speaker 16: of we just haven't seen the bulk of it.

1271
01:01:40,040 --> 01:01:43,040
Speaker 18: Yet, Well, that's possible. The FED has talked about how

1272
01:01:43,080 --> 01:01:47,440
Speaker 18: they don't think that they've we've seen much of the

1273
01:01:47,560 --> 01:01:50,800
Speaker 18: impact of tightening so far. They've been tightening for a

1274
01:01:50,880 --> 01:01:53,840
Speaker 18: little over a year five hundred and twenty five basis points,

1275
01:01:53,920 --> 01:01:56,600
Speaker 18: but the majority of that is yet to hit the economy.

1276
01:01:56,640 --> 01:02:00,160
Speaker 18: And the other question that comes up then is how

1277
01:02:00,240 --> 01:02:03,000
Speaker 18: long does it take tightening credit standards to have an impact?

1278
01:02:03,040 --> 01:02:06,320
Speaker 18: And research shows maybe about a year, So we should

1279
01:02:06,480 --> 01:02:08,480
Speaker 18: start to see it, if not in this report.

1280
01:02:08,240 --> 01:02:08,800
Speaker 1: The next time.

1281
01:02:09,520 --> 01:02:13,160
Speaker 18: But the bottom line, Kayley, is that when you look

1282
01:02:13,320 --> 01:02:16,080
Speaker 18: at the H eight report, which I'm sure you did

1283
01:02:16,200 --> 01:02:22,200
Speaker 18: on Friday, bank lending, bank lending has resumed rising, which

1284
01:02:22,360 --> 01:02:25,200
Speaker 18: is the bottom line of all this. If banks are lending,

1285
01:02:25,400 --> 01:02:29,040
Speaker 18: still lending money to companies, then we don't have a

1286
01:02:29,120 --> 01:02:30,120
Speaker 18: credit crunch yet.

1287
01:02:30,960 --> 01:02:32,600
Speaker 2: So then, Michael, can we call this good news?

1288
01:02:33,800 --> 01:02:35,400
Speaker 18: I think you could call it good news or just

1289
01:02:35,480 --> 01:02:38,520
Speaker 18: sort of news that doesn't really affect a whole lot.

1290
01:02:40,760 --> 01:02:45,200
Speaker 18: You know, it's a survey of how bankers feel about

1291
01:02:45,240 --> 01:02:47,840
Speaker 18: what they're doing, so it's not hard data, so you

1292
01:02:47,960 --> 01:02:49,960
Speaker 18: can't really say it proves a whole lot. You get

1293
01:02:50,040 --> 01:02:53,720
Speaker 18: more out of the H eight report in terms of

1294
01:02:53,800 --> 01:02:55,920
Speaker 18: hard data then you get from this, But it does

1295
01:02:56,000 --> 01:02:57,760
Speaker 18: give you sort of the mood music, and the mood

1296
01:02:57,840 --> 01:03:02,800
Speaker 18: music is I guess you point to the basically unchanged part.

1297
01:03:03,680 --> 01:03:07,120
Speaker 16: Well on the subject of mood music and just fed reports.

1298
01:03:07,160 --> 01:03:09,560
Speaker 16: We get another one this afternoon at four pm. The

1299
01:03:09,680 --> 01:03:12,440
Speaker 16: Financial Stability Report will be dropping, Mike. Could that one

1300
01:03:12,560 --> 01:03:13,240
Speaker 16: be more interesting?

1301
01:03:14,440 --> 01:03:16,680
Speaker 18: I don't think so, and I'm not trying to downplay it,

1302
01:03:16,760 --> 01:03:18,840
Speaker 18: but it's going to be backward looking. It's going to

1303
01:03:18,920 --> 01:03:23,120
Speaker 18: tell us what happened in March, which we already know,

1304
01:03:23,800 --> 01:03:26,680
Speaker 18: and so I don't think it's going to be making

1305
01:03:26,760 --> 01:03:29,880
Speaker 18: a judgment on the stability of all these banks today,

1306
01:03:30,440 --> 01:03:32,880
Speaker 18: which is kind of what all investors are looking at.

1307
01:03:34,000 --> 01:03:37,000
Speaker 18: They seem to be feeling better about the banks, but

1308
01:03:37,120 --> 01:03:39,520
Speaker 18: we've seen a lot of volatility in that. So it

1309
01:03:39,640 --> 01:03:42,280
Speaker 18: will be interesting to read and interesting to see where

1310
01:03:42,680 --> 01:03:45,040
Speaker 18: the Fed saw problems, but I don't think it's going

1311
01:03:45,080 --> 01:03:47,160
Speaker 18: to give us much of a heads up about where

1312
01:03:47,200 --> 01:03:48,120
Speaker 18: we're going to go from here.

1313
01:03:48,520 --> 01:03:51,960
Speaker 2: Spending time with Michael McKee, Bloomberg International Economics and Policy

1314
01:03:52,040 --> 01:03:55,000
Speaker 2: correspondent with us from New York, Ken Ivy here without

1315
01:03:55,000 --> 01:03:58,720
Speaker 2: asking you about the debt limit debate here in Washington, Michael,

1316
01:03:58,800 --> 01:04:03,600
Speaker 2: and the view from the market as you consider interest rates,

1317
01:04:03,760 --> 01:04:06,040
Speaker 2: as you consider bond yields towards say, the end of

1318
01:04:06,040 --> 01:04:08,200
Speaker 2: the day tomorrow, and we're going to get some kind

1319
01:04:08,240 --> 01:04:10,880
Speaker 2: of a readout on this meeting, what are investors actually

1320
01:04:10,960 --> 01:04:13,040
Speaker 2: looking for? Are they realistic that this is going to

1321
01:04:13,080 --> 01:04:14,680
Speaker 2: take more than tomorrow to figure out?

1322
01:04:15,080 --> 01:04:17,920
Speaker 18: Well, I think it's very realistic that we're going to

1323
01:04:17,960 --> 01:04:18,960
Speaker 18: get this punted.

1324
01:04:18,720 --> 01:04:19,280
Speaker 1: Down the road.

1325
01:04:19,320 --> 01:04:20,920
Speaker 2: I don't think there's a market though.

1326
01:04:21,720 --> 01:04:23,840
Speaker 18: I think the market believes that, and I think I

1327
01:04:23,920 --> 01:04:26,640
Speaker 18: said last week that one reason we're not seeing the

1328
01:04:26,760 --> 01:04:32,920
Speaker 18: market react lately is because they do think they will

1329
01:04:33,000 --> 01:04:35,360
Speaker 18: fail in the short run and that this will just

1330
01:04:35,440 --> 01:04:38,240
Speaker 18: get kicked down the road. That nobody wants to default,

1331
01:04:38,360 --> 01:04:42,080
Speaker 18: so they'll pass a temporary measure and maybe push this

1332
01:04:42,160 --> 01:04:45,640
Speaker 18: out to September thirtieth, and then everybody can sort of

1333
01:04:45,720 --> 01:04:48,080
Speaker 18: forget about it for a couple of months until the

1334
01:04:48,160 --> 01:04:53,800
Speaker 18: headlines start arriving about we're getting close to the default date.

1335
01:04:54,400 --> 01:04:57,920
Speaker 2: So it sounds, Kaylee, like the market expects nothing tomorrow.

1336
01:04:58,760 --> 01:05:00,640
Speaker 11: Well, and maybe nothing's what they'll get.

1337
01:05:00,720 --> 01:05:04,040
Speaker 16: So maybe that is a matching of expectations.

1338
01:05:05,960 --> 01:05:07,200
Speaker 18: You'll get nothing and you'll like it.

1339
01:05:07,760 --> 01:05:07,960
Speaker 7: Yeah.

1340
01:05:08,400 --> 01:05:10,640
Speaker 16: Well, and so I guess this kind of raises the

1341
01:05:10,720 --> 01:05:13,000
Speaker 16: question of is the only thing, whether we get it

1342
01:05:13,040 --> 01:05:15,080
Speaker 16: from the US government or from the Federal Reserve that

1343
01:05:15,880 --> 01:05:20,800
Speaker 16: matters next week? Actually, just the inflation print on Wednesday, that.

1344
01:05:21,000 --> 01:05:25,280
Speaker 18: Is I think a correct view, Kaylee, Because we've got

1345
01:05:25,360 --> 01:05:29,840
Speaker 18: another inflation print, another CPI and a PCE report before

1346
01:05:29,880 --> 01:05:33,440
Speaker 18: the next Fed meeting. We've got another jobs report, We've

1347
01:05:33,480 --> 01:05:36,640
Speaker 18: got a couple of retail sales reports. So there's a

1348
01:05:36,680 --> 01:05:38,840
Speaker 18: lot of data still to come between now and then,

1349
01:05:39,040 --> 01:05:42,840
Speaker 18: and inflation is what's really driving the FED. J Pol

1350
01:05:43,000 --> 01:05:46,760
Speaker 18: made that clear at the last meeting. So if you're

1351
01:05:46,800 --> 01:05:48,800
Speaker 18: going to have a market view based on what you

1352
01:05:48,880 --> 01:05:50,280
Speaker 18: think the Fed is going to do, I think you're

1353
01:05:50,280 --> 01:05:51,680
Speaker 18: going to build it around the CPI.

1354
01:05:52,720 --> 01:05:54,960
Speaker 2: Great to talk to you, Michael, as always, Michael McKee

1355
01:05:55,320 --> 01:05:59,080
Speaker 2: with us from World Headquarters in New York. So Wednesday, Kayley,

1356
01:05:59,200 --> 01:06:00,560
Speaker 2: could be the day if there's going to be a

1357
01:06:00,600 --> 01:06:04,480
Speaker 2: big market puke. If Kevin McCarthy says this went off

1358
01:06:04,560 --> 01:06:07,080
Speaker 2: the rails, I don't trust Joe Biden, then the next

1359
01:06:07,160 --> 01:06:09,960
Speaker 2: morning you get a bad number on the CPI at

1360
01:06:10,040 --> 01:06:12,320
Speaker 2: nine thirty, that's when it gets real.

1361
01:06:12,480 --> 01:06:16,280
Speaker 11: Right, Sorry, Carol Masters, one word in one way, one word.

1362
01:06:17,520 --> 01:06:20,400
Speaker 16: I think that's you go on the terminal.

1363
01:06:20,760 --> 01:06:24,000
Speaker 2: There's you know, Kaylee Lines introduced me to that. Actually

1364
01:06:24,120 --> 01:06:27,000
Speaker 2: that that turner phrase because it actually means something. Right.

1365
01:06:27,160 --> 01:06:30,440
Speaker 16: Yeah, Well, there are days where the market just objectively

1366
01:06:30,600 --> 01:06:31,880
Speaker 16: looks like it's puking exactly.

1367
01:06:31,880 --> 01:06:33,280
Speaker 11: We'll see if we get one of those this week.

1368
01:06:33,360 --> 01:06:36,720
Speaker 2: Wait for Wednesday at nine thirty. No pressure at the

1369
01:06:36,760 --> 01:06:40,200
Speaker 2: White House for Kaylee lions On, Joe Matthew, This is Bloomberg.

1370
01:06:44,160 --> 01:06:46,440
Speaker 2: Thanks for listening to The Sound On podcast. Make sure

1371
01:06:46,480 --> 01:06:49,320
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1372
01:06:49,400 --> 01:06:51,960
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1373
01:06:52,000 --> 01:06:55,040
Speaker 2: us live every weekday from Washington, DC at one pm

1374
01:06:55,160 --> 01:06:57,160
Speaker 2: Eastern Time at Bloomberg dot com